Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — WALES

British Rail

Mr. John P. Smith: To ask the Secretary of State for Wales what recent consultations he has had with British Rail; and what matters were discussed.

The Minister of State, Welsh Office (Mr. Wyn Roberts): My right hon. Friend and I and our officials consult British Rail regularly on a wide range of issues.

Mr. Smith: I thank the Minister for that reply. When he and his colleagues next meet the chairman of British Rail will they discuss the possibility of establishing a passenger rail link to Cardiff Wales airport? I agree with the director of that airport that such a rail link is essential for its future as an international airport. Such an airport is vital to the continued success of the south Wales economy. We must recognise that the cutting edge of business communications is air travel. If we make the mistake of not establishing adequate surface links in Wales we shall fall behind other regions and other countries and we shall not get our fair share of the cake in Europe after 1992.

Mr. Roberts: The hon. Gentleman is, I think, aware that South Glamorgan county council and British Rail are in the lead on this proposal. They examined it last year, but came to the conclusion that there was not an economic case for it. I understand, however, that they are still examining the possibility of running an executive coach from the airport to Cardiff's hotels in addition to the hourly bus service from Cardiff to the airport.
I agree with the hon. Gentleman that we should like to do all that we can to help further the interests of the airport and to meet the economic requirements of south Wales.

Mr. Anderson: Will the Minister ask the chairman of British Rail why it continues to treat Wales as though it were an impoverished cousin, fit only for the hand-me-downs from more wealthy members of the family? Is he aware, for example, that the new high-speed trains that we shall receive in south Wales will come into operation when they are no longer needed, after the electrification of the east coast mainline?

Mr. Roberts: I cannot agree with the hon. Gentleman. We consult British Rail and we are pleased with some of the things it has done. It is, for example, providing a first-class service from Paddington to and from south Wales. We have asked for extra trains to be provided and

those trains will be provided from next May. British Rail meets our requirements whenever they are commercially viable.

Rechem

Mr. Geraint Howells: To ask the Secretary of State for Wales what representations he has received about the importation of toxic waste bound for the Rechem incineration plant.

The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist): My right hon. Friend has received a number of representations.

Mr. Howells: I am grateful to the Minister for that reply. Can he confirm that the Germans are not keen to install a similar plant in their country as they believe that it is not safe? If that is so, what plans does the Minister have to safeguard the interests of the Welsh people?

Mr. Grist: I think that the hon. Gentleman will know of our proposals in the current Environmental Protection Bill whereby we wish to restrict the importation of waste into this country, although we see a role for dealing with special wastes. I would not care to comment on the activities of an allied Government.

Mr. Favell: It is absolutely vital that such plants should operate safely and, therefore, the new proposed legislation is welcome. Is it reasonable for organisations such as Friends of the Earth to attack companies such as Rechem, which is ridding the world of unwanted chemicals? Surely that company is being a friend of the earth.

Mr. Grist: If we did not have such firms the question would arise as to exactly what would happen to the PCBs and other emissions. Presumably, they would endanger Third world countries which are too poor to have our high technology.

Mr. Murphy: Is it not true that the large profits made by Rechem come from imports and that those profits have declined dramatically in the past few weeks? Is the Minister aware that reports in the business press this weekend have indicated possible insider dealing in Rechem shares? Will he ask his right hon. Friend the Secretary of State for Trade and Industry to investigate those reports? Does he accept that the only answer to this controversy is a proper, independent public inquiry?

Mr. Grist: After that barrage, I am not quite sure into what the hon. Gentleman wants an inquiry. I do not care to comment on the insider dealings, but I have no doubt that my right hon. Friend the Secretary of State will have noted what the hon. Gentleman said. Only 20 per cent. of the company's dealings come from imported waste and, if there is a fall in the company's profitability, I imagine that it would be of some concern to the hon. Gentleman's constituents who work there.

Uniform Business Rate

Mr. Murphy: To ask the Secretary of State for Wales what representations he has received regarding the implementation of the new business rate in Wales.

Mr. Flynn: To ask the Secretary of State for Wales what representations he has had on the Welsh business rate level.

The Secretary of State for Wales (Mr. Peter Walker): I have received a number of such representations.

Mr. Murphy: Is the Secretary of State aware of today's business news in south Wales—a staggering increase in the number of bankruptcies and liquidations of small businesses? Does he accept that the business tax will increase the possibility of such events? Why does he pretend to help industry in Wales but introduce a tax that is universally condemned by all organisations that represent commerce in the Principality?

Mr. Walker: I am well aware of today's commercial news. I have seen the survey done by the Cardiff chamber of commerce and industry which shows that 24 per cent. of firms expect to take on more people in 1990—three times more than those set to reduce their work force—that turnover is 75 per cent. higher than last year, and that firms expect 60 per cent. higher profits. That fits in with an industrial survey carried out by the Institute of Directors, which comes to similar conclusions. We are having record inward investment, record growth and a record drop in unemployment. I am sure that the news that factories and warehouses in Wales will have a 27 per cent. reduction in their business rate will be good news for the Welsh economy.

Mr. Flynn: Does the Secretary of State recall that when he was Minister of Agriculture, Fisheries and Food he gave farmers the incredible advice that if a nuclear attack was imminent they should drive their cows into ditches and cover them with a tarpaulin sheet? Is not the advice and protection that he has given to Welsh business men just about as effective as a tarpaulin sheet would be against a nuclear attack? In his long litany of records, the Secretary of State forgot that today we know that there are record bankruptcies among Welsh businesses. Why do Welsh businesses have to pay 5 per cent. more for their business rate than those in England? What will he do about it?

Mr. Walker: Once again, the hon. Gentleman's production of fiction is on the most extraordinary scale. As Minister for Agriculture, Fisheries and Food, I never made any such remarks, which are a total work of fiction by the hon. Gentleman. Welsh businesses will contribute 20 per cent. of the costs of local government and those in England, 30 per cent. If the hon. Gentleman calls that a disadvantage to Welsh business, that is a funny analysis.

Mr. Burns: When replying to representations he receives about the business rate, will my right hon. Friend tell those people that when the transitional phase is over, the maximum amount by which the business rate can increase in any one year will be the inflation rate? That will be infinitely superior to some of the rate increases faced by businesses in Wales over the past 10 to 15 years. Will he confirm that when we take the business rate and Government funding together, community charge payers in Wales will pay only 15 per cent. of local government finance?

Mr. Walker: My hon. Friend is quite correct—community charge payers will pay only 15 per cent. of local government finance. I am glad that it is also true that the rate burden of factories and warehouses throughout Wales will be reduced by 27 per cent. That should be a cause for celebration in the Principality.

Mr. Alan Williams: Is not the Secretary of State's early optimism likely to be hit on the head by the very tax that we are discussing? Will he confirm that the interim protection to which he has referred is lost if a firm changes premises? Premises will therefore become more difficult to sell or to rent; firms wanting to expand will find it difficult to move to larger presmises; and firms in trouble will find it difficult to move to smaller ones. Is not that contrary to the mobility that is essential to regional policy?

Mr. Walker: The figures that I gave have nothing to do with the transitional arrangements. I know of the right hon. Gentleman's passion to help the valleys, so he will be pleased to know that valleys factories will have their rate burden reduced by 35 per cent.

Mr. Gwilym Jones: Does my right hon. Friend agree that manufacturing industry will benefit particularly from the new business rate? How will that act on the valleys' initiative? As many concerns involved will be smaller businesses, will he give further consideration to the present threshold of £10,000 and increase it to, say, £15,000?

Mr. Walker: We shall keep the present figures. Factories in the valleys will pay £13 million less in rates, and warehouses £2 million less.

National Curriculum

Mr. Rogers: To ask the Secretary of State for Wales what representations he has received about implementation of the national curriculum in Wales.

Mr. Wyn Roberts: My right hon. Friend has received many representations about the implementation of the national curriculum in Wales, most of which have been in response to the numerous consultations he has conducted.

Mr. Rogers: I am not surprised that the Minister has received many representations, because the whole teaching profession in Wales is disaffected with the proposals. Does not the Minister realise that under these proposals teachers will have not only to teach and maintain discipline but to absorb and implement the new curriculum—and to assess and record almost continuously the progress of their pupils? Teachers have been placed in an impossible position without the resources to help them and without the extra manpower to deal with some of the extremely large classes in the Principality.

Mr. Roberts: The hon. Gentleman must remember that more is being spent per pupil now than when we came to office, and that there are fewer pupils per teacher now than then.
We consult after each national curriculum working group has produced its final report, and we consult again at the draft order stage. We realise, of course, that teachers carry a burden but we also have faith that they will see that the work is well worth doing and that they will carry it out.

Mr. Nicholas Bennett: When does my hon. Friend expect to make a decision on the applications from a number of schools in my constituency to be exempt from Welsh at secondary level?

Mr. Roberts: We shall be consulting separately on the regulations relating to possible exemptions.

Mr. Barry Jones: Is not the national curriculum causing severe difficulties with staffing and with the teaching of


Welsh and modern languages? Teacher morale is very low. Why is the Minister so indecisive? He has legislated for major change but provided minor resources. If he does not wake up he will have a serious situation on his hands.

Mr. Roberts: I am surprised to hear the hon. Gentleman say that. Is he now saying that he is against the introduction of the national curriculum? His party was not when we dealt with the matter in Standing Committee.
As for staff morale, I have explained that teachers have good reason to feel proud of the work that they do. I am pleased to be able to tell the hon. Gentleman that we are raising the additional education support grant and the money available for local education authority training grants from £7 million this year to £10 million in the next.

Sheltered Accommodation

Mr. Ron Davies: To ask the Secretary of State for Wales how many units of local authority-provided sheltered accommodation for the elderly currently exist in Wales.

Mr. Grist: At 1 April 1989 there were 16,219 units of sheltered accommodation for elderly people provided by local authorities in Wales.

Mr. Davies: Will the Minister confirm that under the new ringfencing arrangements local authorities will have to exclude the costs of warden services from their housing accounts, and will therefore no longer be eligible for housing subsidy? Does he realise that the full cost of warden services will then fall on the poll tax? The Minister's estimate of poll tax in the Rhymney valley of £166 per head has already increased on the basis of the local authority estimate of £225 per head. That seems to generate laughter from the Secretary of State. Will the Minister seriously reconsider those elements of local authority expenditure that should be eligible for housing subsidy?

Mr. Grist: The hon. Gentleman overlooks the considerable increase in funds that are being made available next year to local authorities for housing and through the Housing Corporation for mixed housing in sheltered accommodation. The hon. Gentleman can look there for considerable growth. The effect of the pay of wardens on the community charge will be infinitesimal compared with the good that will be done by sheltered accommodation.

Mr. Michael: Will the Minister compare his figure of 16,200 units of accommodation with the anticipated increase in the number of elderly—48,000 over the next 20 years—and with the figure for the very elderly, those over 85, of 26,000? Given the emphasis on community care and on people being enabled to live independent lives, will he provide the money to enable local authorities to undertake rapid acceleration in the provision of sheltered accommodation?

Mr. Grist: The hon. Gentleman should consider that we have been able to provide the finance for an increase of more than 3,000 units of accommodation for elderly people in the last two and a half years. We shall be able to maintain that rate in future. He will also be aware of the new renovation grants scheme that will considerably assist

private elderly owners in Wales, of whom we have a high proportion and for whom local authorities will have an unlimited financial draw on the Treasury.

M4 (Port Talbot)

Mr. Gareth Wardell: To ask the Secretary of State for Wales in which month in 1991 the two unfinished sections of the M4 in the Port Talbot area will see work commence; and by which month in 1991 the work will be completed.

Mr. Wyn Roberts: Work on the Briton Ferry-Earlswood and Baglan-Briton Ferry schemes is planned to start early in the period April 1991 to March 1994. The schemes will take two and a half years and three years respectively and are expected to be completed in mid-1994. It is not possible to be more precise at this stage.

Mr. Wardell: The Minister will know that it is a national disgrace that after 10 years of Conservative rule there is still not a single finished motorway in Wales. Will he look again at this to see whether this missing gap in the M4 can be filled before the time period that he mentioned? That gap is a major sore in the economy of south Wales and urgently needs attention.

Mr. Roberts: If it has been a disgrace for 10 years I am surprised that the previous Labour Government did not anticipate building this section of the M4-A48. We have planned extremely well. The hon. Gentleman will know that we have already carried out remedial works at the Baglan roundabout which have eased traffic congestion there. We have further works planned for the two other roundabouts, and here we have work that is estimated to cost £116 million at November 1988 prices. We shall accomplish that work within four years. That is a very good rate of progress for the building of roads.

Rechem

Mr. Livsey: To ask the Secretary of State for Wales if he will make a statement on the taking of soil samples around the Rechem incinerator.

Mr. Grist: My right hon. Friend is considering what further action may be necessary in the light of the results of monitoring undertaken by the Welsh Office and other agencies in the Pontypool area.

Mr. Livsey: Will the Minister authorise comprehensive environmental tests not only of the soil but of grass and meat to test for toxins passing into the food chain? Does he agree that the stock exchange is investigating Rechem share insider dealings and that a Welsh Office public inquiry on Rechem is long overdue?

Mr. Grist: That seems a very muddled supplementary. Her Majesty's inspectorate of pollution is currently conducting further environmental soil surveys in the vicinity of various types of incincerators, including that at Pontypool. As I said in my answer, and as the hon. Gentleman will know, we have been carrying out various surveys ourselves and releasing the results to interested parties.

Mr. Alan Williams: Given the poor level of monitoring of the plant by Her Majesty's inspectorate of pollution and the general lack of confidence in HMIP's work, will the


Minister note the work commissioned by Torfaen borough council, whose independent analysis shows that levels of polychlorinated biphenyls in grasslands around the Rechem plant are extremely high—50 to 100 times the background? In the light of such findings and of the general concern in the area, why does the Welsh Office refuse to allow a public inquiry into the operations of the plant?

Mr. Grist: The hon. Gentleman has raised this matter before, I think in the Select Committee. The surveys carried out by HMIP are the surveys for which we have most respect. We aware of the findings given to us by Torfaen borough council, and that is why we have instituted investigations of our own. We are looking into the findings of all the surveys to decide what step to take next.

Hill Livestock Compensatory Allowance

Mr. Ieuan Wyn Jones: To ask the Secretary of State for Wales if he will make a statement on hill livestock compensatory allowance payments in 1990.

Mr. Peter Walker: We shall announce the hill livestock compensatory allowance rates for 1990 shortly.

Mr. Jones: The Secretary of State will be aware that the value of HLCAs has been eroded by inflation since the last increase in 1986 and that in 1989 incomes in the less-favoured areas fell by 13 per cent. in real terms. He will also be aware that the European Commission's cut will represent a loss to Welsh farmers of £1.2 million in HLCA payments this year. Will the Secretary of State give the House and Welsh farmers an assurance that the Government will make up the difference?

Mr. Walker: The hon. Gentleman knows that last year the Government gave careful conideration to the matter and paid out £30.2 million in allowances. Our latest figures show that net farm incomes on less-favoured area livestock farms rose by just under 40 per cent. on average, partly reflecting increases in output and lower-than-expected increases in input costs.

Mr. Barry Jones: Will the Secretary of State consider a concerted policy programme to bring greater social and economic prosperity to Wales? Has he carefully assessed the need for a rural affairs unit in his Department—for example, a task force for north Wales? Will he fight harder in Brussels for rural Wales?

Mr. Walker: The hon. Gentleman asks about help for rural Wales. I can only say that the reduction in unemployment, the increased farm income figures that I have just given and the programme for north Wales that we have just announced completely dwart anything that was achieved when the hon. Gentleman was a Minister at the Welsh Office.

Inward Investment

Mr. Cran: To ask the Secretary of State for Wales what figures he has for the amount of inward investment that took place in Wales in 1989.

Mr. Peter Walker: I am pleased to say that preliminary figures show that during 1989, Wales secured on average

two projects per week—100 projects, promising 8,252 new and safeguarded jobs and a capital investment of £520 million.

Mr. Cran: Does my right hon. Friend agree that the success of the job-attracting agencies in Wales has been outstanding and that they have beaten into a cocked hat the achievements of the other job-attracting agencies in the United Kingdom? Does he further agree that the quality of that investment is far higher than was the case in the 1960s and 1970s and is unlikely to suffer in the same way as investment in those decades suffered when adverse trading conditions came along?

Mr. Walker: The quality has been very high. An important factor for the Welsh economy is that three of the biggest inward investments of the past two years have been in the Toyota and Ford engine plants and the Bosch motor component plant, which are all under construction and have yet to recruit labour forces. When fully in production, those plants will require a whole mass of component manufacturers to supply them. The investment has been of high quality and will bring permanent benefit to the Welsh economy.

Mr. Roy Hughes: The Secretary of State talks of inward investment. But does he appreciate that today Mitel, which has a large factory in Caldicot, has announced its intention of divesting itself of its 51 per cent. shareholding in that company? Does the Secretary of State realise that the company has pioneered advanced technology? What is to be the future of the work people employed there?

Mr. Walker: I cannot comment on an announcement about the disposal of the ownership of a particular company. However, inward investment into the hon. Gentleman's constituency continues to be made on a considerable scale, as in the past.

Tertiary Education, Clwyd

Sir Anthony Meyer: To ask the Secretary of State for Wales what proposals have been submitted to him by Clwyd county council for tertiary reorganisation of the schools in Clwyd.

Mr. Wyn Roberts: My right hon. Friend has not received any formal proposals affecting the organisation of secondary education in Clwyd.

Sir Anthony Meyer: As my hon. Friend has a wider area of responsibility than his English counterpart in the Department of Education and Science, will he, when assessing any proposals from Clwyd county council, take into account not only the possible educational advantages of concentrating sixth form teaching in one place but the conceivable social disadvantages of removing from a place such as Abergele the element of a school that provides a valuable service to the community?

Mr. Roberts: Tertiary education is only one option for consideration by local education authorities wishing to rationalise their provision for 16 to 19-year-olds. It would not be right for me to comment on the merits of tertiary education in Clwyd. If the local education authority publishes notices of its intention to abolish sixth forms and there are statutory objections, the matter would be referred to my right hon. Friend the Secretary of State for Wales, for him to determine.

Mr. Foot: Does the Minister recall the reply that the Secretary of State was ill-advised enough to give me during Welsh questions last time, when I suggested that his best course would be to make his next annual or biannual speech on the catastrophies of the Government's general economic policy in the constituency of Clwyd, North-West? Do not recent events emphasise the truth of that? Will the Minister ask the Secretary of State to make special arrangements to visit Clwyd, North-West, not only to speak on the subject of tertiary education, which is very important, but to give his views on interest rates at 15 per cent. and all the other elements of the Government's catastrophic economic policy? We want that speech to be made as soon as possible, and only regret that it was not made last week.

Mr. Roberts: My right hon. Friend the Secretary of State is welcome throughout north Wales, including the constituency of my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer), who is very much his own man, and my constituency of Conwy.

Dr. Thomas: Will the Secretary of State and the Minister of State consider the future of tertiary education in Clwyd in the context of the plans that are simultaneously being prepared for Gwynedd? The two counties share a substantial border, and there is a clear need for tertiary facilities along the border to be shared. Will the Secretary of State consider any representations made by my hon. Friend the Member for Clwyd, North-West (Sir A. Meyer), who has a distinguished record of public service to his constituents and whom we shall certainly miss if the disastrous course that was inflicted on the Conservative party in Clwyd, North-West is followed?

Mr. Roberts: A tertiary education scheme has already been adopted for Gwent, West Glamorgan and South Glamorgan, and a similar scheme is under consideration for Gwynedd and Mid-Glamorgan. I am sure that Clwyd's proposals will take into account the interests of Gwynedd and that there will be collaboration between the two. I remarked earlier that my hon. Friend the Member for Clwyd, North-West is very much his own man. He has an enormous amount of courage, which we all respect.

Polytechnic of Wales

Dr. Kim Howells: To ask the Secretary of State for Wales when he last met representatives of the Polytechnic of Wales; and what was discussed.

Mr. Wyn Roberts: Neither my right hon. Friend nor myself have had occasion to meet representatives of the Polytechnic of Wales in the last 12 months.

Dr. Howells: In terms of the sums allocated across all subjects, the Polytechnic of Wales receives half the amount allocated to universities, and about 12 per cent. less than that allocated to British polytechnics in general. The Secretary of State and the Minister for State know the vital role that the polytechnic plays in supplying scientific and engineering expertise to the new Welsh industries. What will be done to ensure that its funding is made commensurate with that role?

Mr. Roberts: We have been increasing the funds available to the Polytechnic of Wales in recent years, and

one hopes that they will continue to increase. The polytechnic is, as the hon. Gentleman says, of great importance to us as it serves industry in south Wales. I have faith in its future being assured.

Green Pound

Mr. Nicholas Bennett: To ask the Secretary of State for Wales what representations he has received concerning the effect of the green pound gap on Welsh farming; and if he will make a statement.

Mr. Peter Walker: I have received a total of eight written representations; seven from hon. Friends and hon. Members representing Welsh constituencies, and one from the Wales branch of the National Farmers Union.

Mr. Bennett: Is my right hon. Friend aware of the considerable concern among farmers in Wales about their growing competitive disadvantage compared with farmers in other parts of the European Community as a result of the increasing gap in the green pound? Will he make strong representations to my right hon. Friend the Minister of Agriculture, Fisheries and Food, saying that this is a matter which requires deep cuts in the forthcoming price round in the EC negotiations?

Mr. Walker: Yes, Sir. I am well aware from experience —my right hon. Friend the Minister of Agriculture, Fisheries and Food is also aware of it—that, in a price-fixing exercise, the movement of monetary compensatory amounts is of considerable importance. There is a commitment to remove all monetary gaps and, therefore, MCAs by the end of 1992. When that happens, it will be of great benefit to Welsh agriculture.

Polychlorinated Biphenyls

Mr. Denzil Davies: To ask the Secretary of State for Wales whether he will carry out an inquiry into the effect upon the environment of the emissions of polychlorinated biphenyls from the combustion of plastic clinical waste in hospital incinerators in Wales.

Mr. Grist: No, Sir. Such an inquiry would anticipate implementation of the proposals contained in the Environmental Protection Bill which my right hon. Friend the Secretary of State for the Environment laid before the House on 20 December 1989. When it is enacted, NHS incinerators will be required to meet operating and emission standards that will be published and will be enforceable by the relevant local authorities.

Mr. Davies: Does the Minister agree that, when plastic PCBs are burnt—a considerable amount is burnt in hospital incinerators—biphenyls and dioxins are emitted unless the combustion temperature is extremely high? He mentioned the new legislation. At what temperature should these plastics be burnt to prevent the emission of biphenyls and dioxins?

Mr. Grist: My right hon. Friend the Secretary of State for the Environment is undertaking consultations on standards of incineration which it is intended should be introduced later this year.

Sir Dudley Smith: Does my hon. Friend agree that there has been so much controversy about this in Wales that it is a matter of considerable urgency? Will he urge my right


hon. Friend the Secretary of State to take every step to get the issue moving? Is my hon. Friend aware that the county town of Warwick has been threatened with an incinerator and that there is considerable anxiety about it?

Mr. Grist: My hon. Friend should be reassured by the fact that the power to control and license the incinerator would be given to his local authority by the proposals in our Bill. He would be able to exercise such authority locally. That should give him and his constituents a great deal of assurance.

Ruthin and Caernarfon Agriculture Department Offices

Dr. Marek: To ask the Secretary of State for Wales what will be (a) the beneficial and (b)  the adverse effects to farming in the proposed reorganisation of the Ruthin and Caernarfon Agriculture Department offices.

Mr. Peter Walker: The reorganisation will provide a more cost-effective administrative structure for my Agriculture Department in Wales. There should be no effect on the farming community, since Ruthin will continue to be served by a substantial area office.

Dr. Marek: Can the Secretary of State give a categorical assurance that no farmer from Clwyd, particularly east Clwyd, will have to travel to Caernarfon, that the furthest he will have to go is to Ruthin, and that he will not suffer any loss of quality because of going to Ruthin?

Mr. Walker: The new area office will be purpose built, and will be linked by a computer network to the other office, so all the information will be readily available.

British Rail

Mr. Anderson: To ask the Secretary of State for Wales whether he will discuss with the chairman of British Rail plans to prepare the rail infrastructure of Wales (a) generally and (b) to improve links with the continent.

Mr. Wyn Roberts: My right hon. Friend will discuss these issues when he next meets the chairman of British Rail.

Mr. Anderson: Are the Government prepared to invest £195 in the report by the Economist intelligence unit, published today, on the social and regional implications of the Channel tunnel? In the report, British Rail is sharply criticised for its failure to plan for the regional effects of the tunnel. Is it not clear that Wales may suffer major adverse repercussions unless the Government intervene as a matter of urgency to protect areas such as Wales?

Mr. Roberts: As the hon. Gentleman knows, British Rail has produced its plan as required, and has made provision for Wales. The hon. Gentleman will know that there will be an overnight passenger service from Swansea to the Channel tunnel and daytime services from south Wales to the international centre at Waterloo; there will also be services from mid-Wales to Wolverhampton to connect with services to the tunnel, and from north Wales to Crewe. Freight terminal sites are also under consideration: there will be one in south Wales, one in the west midlands which will serve mid-Wales and one in Cheshire to serve north Wales.
This is a basic plan, to be reviewed and updated annually. Therefore, I cannot possibly agree that British Rail has completely ignored the interests of Wales.

Oral Answers to Questions — THE ARTS

Admission Charges

Dr. Marek: To ask the Minister for the Arts what is his policy on compulsory admission charges to national museums.

Mr. Haynes: To ask the Minister for the Arts what is his policy on free access to national museums.

The Minister for the Arts (Mr. Richard Luce): The Government's repeatedly stated policy is that the decision whether to operate a system of admission charges or voluntary donations should be for the board of trustees responsible for each institution.

Dr. Marek: Surely the Minister now recognises, given the evidence all round him, that the introduction of charges has affected museum attendances. At the national maritime museum, for example, attendances have dropped by 35 per cent; at the natural history museum they have fallen by 40 per cent; and, worst of all, at the Welsh national museum they have fallen by 85 per cent.
Does the Minister agree with the claim by my hon. Friend for Sheffield, Hillsborough (Mr. Flannery) that the Government believe that people value only what they pay for? Does he value only what he pays for? Does he think that the public value only what they pay for, and does he believe that members of the public who now pay charges to go to museums value those museums doubly because they have paid twice over?

Mr. Luce: The hon. Gentleman may care to note that museum attendance all over the country—including attendance at a mass of independent museums, most of which charge—reached record levels last year, which was museum year. It is entirely for the trustees to decide whether the introduction of charges would bring benefits to the public and to individual museums, and it is right for us to leave that practical, pragmatic decision to them. All this must be seen against the background of a real increase in resources for our national institutions, to the benefit of the taxpayer.

Mr. Haynes: May I ask what responsibility the Minister has? He is always blaming someone else. Let me tell him in no uncertain terms that the proposed charges will reduce attendances, and let me tell him this, too: I have the backing of Nottinghamshire county council, which does a marvellous job for the arts. Let us have less rhetoric from that Dispatch Box, and let us have some action—and we do not want any charges either.

Mr. Luce: I feel inclined to recommend the hon. Gentleman for a drama award: he certainly qualifies for one. 
Each individual institution has its own decision to make. Evidence shows that, since the introduction of charges, attendances at the imperial war museum are up on the last full year in which there were no charges. Other museums have experienced a drop in the first year or two of charges, but it is usually temporary. If museums are to


introduce charges, however, I strongly believe that they must be linked with an improvement in services to the public, and that is what is happening in most museums.

Sir Philip Goodhart: Does my right hon. Friend recognise that the national museums in almost all the EC member countries make admission charges? Does he agree that, in France, all Louvre museum acquisitions are paid for by admission charges? If that is right on the continent, why should it not be right here?

Mr. Luce: My hon. Friend is absolutely right. One is being told repeatedly that people in France are less philistine than people in this country. There is nothing philistine about making admission charges; the vast bulk of the French museums do just that.

Mr. Jessel: Is my right hon. Friend aware that there is no reason why the trustees of museums and galleries should not be allowed to make up their own minds about this matter? Does he know that the most important thing is the quality of display? Will he congratulate the Tate gallery on its rehanging?

Mr. Luce: I am grateful to my hon. Friend. I congratulate the Tate gallery on its remarkable achievement. I am glad that, in addition to sponsorship from British Petroleum, the Government and the taxpayer have been able to contribute to the very excellent rehanging and reorganisation of, the Tate.
My hon. Friend is right to say that there have been remarkable improvements in museums that have introduced charges. That is very important, but it is equally important to note that a large number, if not a majority, of museums that have introduced charges have set aside certain free, open days and hours, in addition to their concessions for school parties and for other people in special categories.

Mr. Fisher: Is it not clear that the Government are content to sit and do nothing while admissions to national museums plummet through the floor? Indeed, are not the Government directly responsible, in that the Minister's refusal properly to fund the base budgets of national museums is forcing museums into making admission charges? Is the Minister now repeating his disgraceful remark to the conference of the Council of Regional Arts Associations a few years ago—that if a service is any good, people will pay for it?

Mr. Luce: The hon. Gentleman talks an awful lot of nonsense. He will have to make up his mind. During previous questions on the arts he was good enough to congratulate the Government on the substantial increase in taxpayers' funding for national museums and galleries. In fact, provision has been made for a 27 per cent. increase in the amount of taxpayers' resources allocated to museums and galleries. To suggest that national museums base decisions on inadequate funding when, in real terms, funding is far greater than it was under the Labour Government is absolute nonsense.

Mr. Cormack: Does my right hon. Friend agree that when the Select Committee examined this matter in 1981, it got it about right? It produced a unanimous report which said that trustees should have the ultimate discretion, but that, in exercising that discretion, they should always make provision for days free of charge and so preserve a great tradition. My right hon. Friend will

agree that if we are seduced by the latest Select Committee report we shall reach the stage of knowing the price of everything and the value of nothing.

Mr. Luce: The Government will, of course, reply to the Select Committee's latest report. My hon. Friend is absolutely right to stress the importance of allowing decisions to be taken on a practical, pragmatic basis by the trustees, who are the people in charge of these national institutions. The evidence suggests that museums that have introduced charges have made a wide range of concessions, including open days and free days. Those changes are extremely important, and they follow the recommendations of the Committee to which my hon. Friend referred.

Wilding Report

Mrs. Golding: To ask the Minister for the Arts how many responses he has received to the Wilding report on funding of the arts.

Mr. Luce: I have received almost 6,000 responses, of which approximately 4,500 are preprinted postcards.

Mrs. Golding: Following the representations from many people, including constituents of mine, will the Minister reject the proposal to merge the West Midlands regional arts association with the East Midlands regional arts association, to form a massive and unwieldy regional body that would attempt to serve more than 9 million people? He will agree that that would be an impossible task.

Mr. Luce: Of course, I take note of what the hon. Lady says. She probably knows that the chairmen of the East Midlands and West Midlands regional arts associations have been to see me and expressed views similar to hers. I shall take very seriously the views of the chairmen and directors of the regional arts associations, as well as the views of hon. Members. My concern is to achieve an arrangement and a structure for funding of the arts that makes sense in terms not only of efficiency but of coherence of funding and management.

Yorkshire-Humberside Arts Link

Mr. Cran: To ask the Minister for the Arts what representations he has received regarding the creation of an arts link between Yorkshire and Humberside.

Mr. Luce: I have received a small number of submissions from individuals and organisations about such a link.

Mr. Cran: Arising from the Wilding report, is my right hon. Friend aware that there is considerable opposition in my neck of the woods to any suggestion of a merger of Humberside and Lincolnshire Arts with the Eastern arts association and that the majority opinion would seem to be that, if there is to be a merger, it should be with the Yorkshire arts association? Will he take that opinion fully into account when he decides these matters?

Mr. Luce: I assure my hon. Friend that I shall do so. I have met a delegation from the Yorkshire arts association and am due to meet one from Lincolnshire and. Humberside Arts this week.

Mr. Heffer: When the Minister has met the delegation from the Yorkshire arts association, will he be prepared to agree with the letter that I sent to him and state that he will see hon. Members—especially Labour Members from Merseyside, but any other hon. Member, too—plus the Merseyside arts committee, to discuss the whole question of the merger between Merseyside Arts and North-West Arts? There is a strong feeling in Merseyside that there should not be a merger because we have a cultural background of our own. We agree with much of the Wilding report, but believe that a merger is not the answer to our problem.

Mr. Luce: If the hon. Gentleman or any other hon. Member wishes to express his or her views to me, I am prepared to hear them, just as I have heard the views of many other hon. Members. The report has to be seen as a whole, and I am glad that the hon. Gentleman said that he accepts or supports many of its recommendations. The report contains 80 recommendations and the objective is to achieve a system of accountability and management of the arts that will serve the arts as we move towards the turn of the century.

Oral Answers to Questions — CIVIL SERVICE

Civil Service Unions

Mr. Fisher: To ask the Minister for the Civil Service when he last met representatives of the Civil Service unions; and what subjects were discussed.

The Minister of State, Privy Council Office (Mr. Richard Luce): I meet representatives of the Civil Service trade unions from time to time. A wide variety of matters is raised.

Mr. Fisher: When the Minister next meets the unions, will he discuss with them the responsibilities and remit of the ombudsman? Will he particularly discuss with them why the ombudsman does not set standards or administer good standards in the public agencies so that the interests of the public are safeguarded? Why can the ombudsman deal only with maladministration when he could be looking into many other important matters on behalf of members of the public?

Mr. Luce: The hon. Gentleman's question relates to the ombudsman's terms of reference, which are a matter for wider debate. As the hon. Gentleman knows, the civil servants in the agencies will remain part of the Civil Service and will be under the responsibility of the Secretary of State of the day. There are no plans to change the ombudsman's terms of reference.

Miss Emma Nicholson: In the light of the report of the Hansard Society, under the chairmanship of Lady Howe, on the deficiency of women in public life that will be published tomorrow, when the Minister next meets the Civil Service will he address himself particularly to that problem? Does he have any women at senior level in his office, for example?

Mr. Luce: I am grateful to my hon. Friend for drawing attention to the report which, I believe, will be published this week. Of course, I and my colleagues in Government will take the report seriously. My concern is to increase the number of able women in the Civil Service to as high a

level as possible, based on merit, ability and fair and open competition. There has been an improvement in the number of women in the service and 60 per cent. of recruits into the service are now women. I am interested in ensuring equality of opportunity.

Dr. Marek: I welcome the Minister's statement to my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) that increasing the powers of the ombudsman is a matter for wide debate. Will the Minister put away his dogma about agencies being the stepping stones for privatisation and a means of lowering the salaries of individual groups of civil servants? The public will not, understand the creation of agencies unless the agencies themselves increase public confidence in them and provide a better public service. Will the Minister ensure that the creation of any further agencies is coupled with service standards for the public so that the public have a better service? Finally, will the right hon. Gentleman initiate that wider debate on increasing the powers of the ombudsman?

Mr. Luce: The hon. Gentleman appears to have muddled several points in his question. I do not know which one he wants me to answer. Whether the powers of the ombudsman need changing is an issue for separate debate.. The policy on agencies is clear, and the Government's first priority is to determine whether any service would be better managed and operated if it were not privatised. If not, the second option is to determine whether it should be made into an agency. That does not preclude the agency from being privatised if, at a later stage, the Government think that that is right. It is because it has been precluded from being privatised that it becomes an agency. Strict performance targets are now set for agencies, which the hon. Gentleman must support as it will lead to an improvement in services.

Mr. Barry Field: Does my right hon. Friend appreciate that many retired civil servants earn much more than they did in employment, thanks to the indexation of their pensions? How can my right hon. Friend reassure the House and the country that the Government are receiving impartial advice on the defeat of inflation, given that civil servants have an inbuilt advantage enjoyed by no other employee in this country?

Mr. Luce: Whatever the terms and conditions of civil servants, I am sure that my hon. Friend did not mean to suggest that they do not give impartial advice. All the evidence suggests that the vast bulk of civil servants give loyal service to the elected Government of the day.

Code of Conduct

Mr. Kirkwood: To ask the Minister for the Civil Service if he will make a statement on the new code of conduct governing the activity of senior civil servants.

Mr. Simon Hughes: To ask the Minister for the Civil Service if he will make a statement on the proposed changes to the Civil Service code of conduct.

Mr. Luce: The relevant section of the Civil Service pay and conditions of service code, which applies to all civil servants, is being revised to take account of the Official Secrets Act 1989.

Mr. Kirkwood: Is the Minister aware that that revision has been widely interpreted as a scandalous attempt by


Hacker to hamstring and hogtie Sir Humphrey? If the conditions that apply to senior civil servants in their duty to the Crown are thought to be deficient, why is it necessary to change them, so as to try to restrict senior civil servants in their duty to the Government as opposed to Her Majesty's estate?

Mr. Luce: I am not sure that I fully understood the hon. Gentleman. The first duty—it is clearly set out—is that civil servants owe their allegiance to Her Majesty's elected Government of the day. The code is being adjusted and revised because of the passing of the Official Secrets Act 1989. It was necessary to do so because certain categories of civil servants, which were formerly subject to criminal proceedings if they had wrongly divulged information, are now subject to ordinary disciplinary proceedings.

Mr. Simon Hughes: Will the Minister take into account the reported views of the leadership of the unions representing the Civil Service, which are opposed to the proposed code?
Will the Minister assure the House that the interests and views of the Civil Service will be properly taken into account and that there will be proper consultations and no hasty decisions? Will he protect the interests of civil servants who found their Box taken over on Friday by a member of Tory Central Office?

Mr. Luce: The Secretary to the Cabinet—the professional head of the home Civil Service—has agreed to meet Civil Service unions to discuss that matter and a number of other issues. There should be no misunderstanding—there is no basic change in the Armstrong guidelines—over matters of conscience for the civil servant. He can apply to his permanent secretary or to the head of the home Civil Service. These new procedures have been in operation since 1987 and they are not changing.

Mr. Richard Shepherd: I understand from what my right hon. Friend is saying about the Armstrong submission to the Treasury Select Committee that, for all practical purposes, for a civil servant the interest of the Government of the day is the national interest—the interest of the Crown. Hon. Members on both sides of the House find it difficult to say that the interests of the Government of the day are exactly synonymous with the national interest. Surely that is wrong in a free democracy and perhaps we need sunshine laws.

Mr. Luce: I should like to clarify the position. As the Government see it, the primary duty of a civil servant is to serve Her Majesty's elected Government of the day. That

has always been the position and it remains the position. There are, rightly, procedures for dealing with a matter of conscience.

Mr. Conway: On the activities of senior civil servants, does my right hon. Friend think that it is wise or desirable that they should have contact with organisations involved in governmental or parliamentary lobbying? Is not that very poor practice?

Mr. Luce: I am not certain whether my hon. Friend refers to serving or to retired civil servants. There are clear rules and obligations and civil servants understand the position. Their duty is to their Minister, who is accountable to Parliament.

Mr. Winnick: Should not any new code for senior civil servants who have official dealings with the police make it clear that where there is deep public disquiet—as now, over the Stalker affair—there should be no resistance to a full public inquiry? Will the right hon. Gentleman pass on that view to the Home Secretary?

Mr. Luce: As the hon. Gentleman implies, that is a matter for my right hon. and learned Friend the Home Secretary. If Mr. Stalker wishes to submit a document to the Government, that is up to him.

Agencies

Mr. David Martin: To ask the Minister for the Civil Service what agencies have been established in the last 12 months.

Mr. Luce: Seven of the 10 executive agencies set up so far were established in the past 12 months. A full list is given in the White Paper "The Financing and Accountability of Next Steps Agencies" (Cm. 914) which is available in the Library of the House.

Mr. Martin: Will my right hon. Friend confirm that the main objective of the agency system is to improve service to the public? Can he give examples of how this is working successfully in practice?

Mr. Luce: My hon. Friend is right. One of the main purposes is to improve the management of the Civil Service, especially the service function. The aim is also to ensure that, by setting performance targets, services to the public or to the interests that are served are improved. There is already evidence of that in the Vehicle Inspectorate and Companies House. There is evidence that the 10 agencies are carrying out surveys on their consumer interests and taking account of the views of those whom they serve. The purpose of these reforms is to lead to a better service to the public.

Points of Order

Mr. Max Madden: On a point of order, Mr. Speaker. I think that you had the good fortune to miss most of Friday's rather boring debate, which was initiated by the hon. Member for Eastbourne (Mr. Gow) and which was enlivened only by the chairman of the Conservative party, who masquerades as the Chancellor of the Duchy of Lancaster on these occasions, admitting that there had been a mistake in that the authorities allowed a Conservative Central Office official to occupy the Civil Servants' Box. The right hon. Gentleman said:
I have already said that I apologise to the House if there was a mistake. There should not have been an official from central office in the Civil Servants Box and he has withdrawn from that position."—[/Official Report, 19 January 1990; Vol. 165, c.558.]
Mr. Deputy Speaker was good enough to say that he would initiate inquiries as to whether the Cabinet Office or any other Department had written to the House authorities requesting permission for the Conservative Central Office official to occupy the Civil Servants' Box. I wonder whether the outcome of those inquiries is now known and whether, Mr. Speaker, you can assure the House that there will not be a repetition of Friday's events.

Mr. Dennis Skinner: Further to the point of order, Mr. Speaker.

Mr. Speaker: Order. Allow me to deal with the first point of order, please.

Mr. Skinner: It is on the same point.

Mr. Speaker: Order. I do not care that it is at the moment. 
The matter was reported to me and I have carefully studied Hansard. I have received a letter of apology from the Chancellor of the Duchy of Lancaster, who accepts personal responsibility for the fact that a Conservative party official was on the list for the Civil Servants Box and was admitted to that Box. I was asked about security. I am satisfied that there was no breach of security at any stage. As the Chancellor of the Duchy of Lancaster has now apologised to me, in addition to the apology that he made to the House on Friday, I regard the matter as having been dealt with as far as I am concerned.

Mr. Nicholas Bennett: On a point of order, Mr. Speaker. You will recall that during the debates on the English revenue support grant last week the Opposition were challenged to state their policy. We have had no reply. In the newspapers this morning we have had a sign that the Labour party wants a property tax which might be levied on separate people in the same household. As the Opposition chose not to say on Thursday what is to be their policy, may we have a statement from them so that we may question them on this important subject and find out exactly what they believe?

Mr. Speaker: I have not studied the whole of Friday's debate, but I am surprised that the matter did not arise then.

Mr. Brian Wilson: Further to the point of order raised by my hon. Friend the Member for Bradford, West (Mr. Madden). Would you Mr. Speaker, rule further on the matter? It is unsatisfactory

and out of order that a clear, gross abuse has been committed deliberately. Surely it is not enough for the Chancellor of the Duchy of Lancaster simply to apologise. The House is entitled to an explanation of how the abuse happened. What happened was part of a pattern of the blurring of lines between the Government and party, which is no accident. We want, and I am sure that you, Mr. Speaker, want from the Chancellor of the Duchy of Lancaster something more than an apology which is, in effect, an apology for being caught.

Mr. Speaker: I have looked into the matter with great care. I received a full apology from the Chancellor of the Duchy of Lancaster in which he explained exactly what happened. I accept that apology. The way in which we deal with each other in matters of this kind implies that if an apology has been given we should accept it.

Mr. Edward Leigh: On a point of order, Mr. Speaker. I am sure that you will agree that your job is to maintain the dignity of the House and its central role in our political affairs. I hope that, like me, you consider that it does not add to our dignity when either the Government or the Opposition deliberately refuse to reveal a policy or fact to the House which is known to them. A major debate last week was held in a vacuum because the Labour party refused to reveal its policy on the new local property tax based on the capital value of houses. Just four days later it revealed its policy. How is that consistent with the dignity of the House?

Mr. Speaker: The House will accept that I am not responsible for the policies of either the Government or the Opposition.

Mr. Tony Banks: Are you, Mr. Speaker, not surprised that someone as experienced as the Chancellor of the Duchy of Lancaster should seek to introduce a member of Central Office into the Civil Servants' Box? After all these years, one would have thought that he would be aware that that clearly was not in order. In his apology, which is easy enough to give, did he explain why the incident arose in the first instance? What sort of security exists behind your Chair? After all, your back needs to be protected. We must make sure that people from Central Office do not creep into the Box.

Mr. Speaker: I am concerned for my back. I have checked and I think that it is safe. I have received a full apology from the Chancellor of the Duchy of Lancaster, and I have nothing more to say on the matter.

Several Hon. Members: rose—

Mr. Speaker: Order. We accept each other's apologies in this House. Mistakes can happen, even here.

Mr. Martin M. Brandon-Bravo: Further to the points of order raised by my hon. Friends the Members for Gainsborough; Hid Horncastle (Mr. Leigh) and for Pembroke (Mr. Bennett). You Mr. Speaker, will recall that during that debate the Minister of State was interrupted and challenged when he said that certain Labour authorities misuse their powers to the detriment of the intended community charge. It has been brought to my notice today by the leader of the Conservative minority in Nottingham county council that the Labour authority seeks to increase spending in that county by over £100 million in order to push the


community charge beyond what is reasonable in anybody's book. Is there no way in which the House can protect my constituents from such conduct by Labour authorities?

Mr. Speaker: The hon. Gentleman must do that himself. It is not a matter for the Chair.

Several Hon. Members: rose—

Mr. Speaker: Order. I have nothing more to say on the matter. An apology has been received and I have accepted it.

Several Hon. Members: rose—

Mr. Speaker: Order.

Mr. Dennis Skinner: How is it that Tory Members can get in to speak?

Mr. Speaker: Order. I cannot call the hon. Gentleman every time he attempts to intervene on a point of order. He got in on Friday.

Mr. Skinner: rose—

Mr. Speaker: Is this a different point of order?

Mr. Skinner: No, it is not.

Mr. Speaker: Then I cannot hear it. I must ask the hon. Gentleman to sit down.

Several Hon. Members: rose—

Mr. Speaker: Order. I have nothing more to say. I have accepted the apology.

Mr. Tarn Dalyell: On a different point of order, Mr. Speaker. Is it not deeply unsatisfactory that named public figures are, by implication, under a cloud of suspicion, seemingly for having done something wrong? Is it not a pity, therefore, that you may not have received a request from the Home Secretary, the Attorney-General or the Minister for the Civil Service at least to clarify the assertion by Mr. John Stalker that the letters "RA" stand for either Armstrong or Robert Andrew? Should not the House of Commons be told exactly what the Government know about Mr. Stalker's assertions on this delicate matter which is of increasing public anxiety, and rightly so?

Mr. Speaker: I heard what the Minister for the Civil Service said. This is not a matter for the Chair. What the hon. Gentleman said will have been heard by members of the Government Front Bench.

Mr. Skinner: rose—

Mr. Speaker: Order. Is this about a different matter? I am not taking further points of order on what happened on Friday.

Mr. Skinner: This is a different matter.

Mr. Speaker: Order. I hope that I can trust the hon. Gentleman. He has already said once that his point of order is on the same matter. I shall hear it only if it is on an entirely different matter. As a man of honour, he should do what he says.

Mr. Skinner: You will recall, Mr. Speaker, that in a previous parliamentary Session you were in the Chair

when a statement had to be made about issuing passes for admission to this House. It was followed by a debate. On that occasion my hon. Friend the Member for Islington, North (Mr. Corbyn) was at the centre of the matter. There was widespread discussion about people who should not be allowed into the House getting into this place. It has been made clear that people who are allowed into the Box must receive authority—

Mr. Speaker: Order. The hon. Gentleman is letting himself down, and me.

Mr. Skinner: rose—

Mr. Speaker: No. The hon. Gentleman said that he would raise a different matter and now he is trying to get round it. I am sorry, but I cannot hear him further.

Several Hon. Members: rose—

Mr. Speaker: Order. I am not hearing any more.

Mr. D. N. Campbell-Savours: On a different point of order, Mr. Speaker.

Mr. Speaker: Order. I shall not hear points of order about the same matter. I shall take the point only if it is on a different matter.

Mr. Campbell-Savours: On a different point of order, Mr. Speaker. Will you confirm that, if Mr. Stalker wants to submit documents under the protection of privilege, he can submit them to the Chairman of the Home Affairs Select Committee and if he does not need privilege, he can submit them to the Library where they can be made available to hon. Members? In the circumstances, is it not a little unreasonable of Mr. Stalker to dangle these documents before the British public without being prepared to reveal them in so far as Parliament wants to know what is happening?

Mr. Speaker: That is a matter for Mr. Stalker. It is not a matter of order in the Chamber.

Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. I seek to raise a question about passes—

Mr. Speaker: Order. Is the hon. Gentleman talking about last Friday's passes?

Mr. Corbyn: I am talking about the point made two years ago in the debate about research assistants. It was made clear that no one could be admitted beyond the public areas of this building without a pass and that a pass had to be approved, in effect, through your office, Mr. Speaker. I am worried that those rules are not being upheld. If they are not, it makes nonsense of the debate we had two years ago. It would be seen to be entirely selective against one person if others, merely at the behest of another Member, were brought not just beyond the public areas of this building, but, in effect, almost into the Chamber.

Mr. Speaker: We do not need to dwell on this. I have looked carefully at the matter, and in my original comments I said that I had considered the security aspect of it. I am satisfied that there was no security risk and that an error was made. I hope that it will not happen again.

Orders of the Day — Social Security Bill

Order for Second Reading read.

The Secretary of State for Social Security (Mr. Tony Newton): I beg to move, That the Bill be now read a Second time.
Those in the House who have shared with me much of the experience—that certainly includes the hon. Member for Oldham, West (Mr. Meacher)—will know that there has been a Social Security Bill before the House every year since the Government took office. I make no apology for that and for presenting yet another this year. It would no doubt be rash of me to suggest any parallel with Finance Bills, but it is certainly right, as with the tax system, to ensure that we have the means to keep our social security system properly adapted to changing needs and demands.
This year's Bill is relatively short, but its scope is wide ranging. It makes a number of important changes across the areas of social security and occupational pensions. As with most Social Security Bills, it has both substantial measures of policy and some necessary points—quite a lot of them—of technicality and detail. The two main themes of the Bill are a number of changes to disability benefits and the provision of greater protection for the members of occupational pension schemes. In addition, the Bill makes a number of more minor changes to various benefits, to national insurance contributions, and a change to the scope of the national insurance fund. It also gives new powers to my right hon. Friend the Secretary of State for Energy—who is admirably represented this afternoon—to introduce a new scheme of grants towards the cost of insulation measures in low-income households.
During my speech I shall seek to describe the main provisions more fully, but, of course, the Bill as such is only one element in the continuing development of social security policy as a whole. As the House will be aware, next year we will spend more than £1 billion each week on social security. The total expenditure next year of £56 billion is more than a third higher in real terms than expenditure in 1979 when the Government took office. Hon. Members will understand that the point that I want to stress in the context of the Bill is the increasingly important part of that expenditure that is committed to providing for the needs of disabled people. We are spending more than £8 billion this year alone on the long-term sick and disabled. Since 1979 such expenditure has almost doubled in real terms, largely because of the great increases in the number of beneficiaries.

Mr. David Winnick: rose——

Mr. Newton: I shall give way in a moment.
To take just two examples of the increase in coverage since 1979, which has been an important gain for the disabled community, the number receiving help with extra costs through mobility allowance has multiplied six times and the number receiving help through attendance allowance has increased three times. Those are encouraging and welcome trends.

Mr. Winnick: I had hoped to intervene before the right hon. Gentleman spoke of the disabled, so I hope that he will bear with me.
The right hon. Gentleman has spoken about the increased sums spent on social security, but he should bear in mind the increasing hardship faced by so many pensioners. That is certainly the case in my constituency where pensioners constantly write to me and visit me to discuss their problems. Their pensions have not increased in line with earnings and they have lost a great deal. A married couple, for example, have lost £20 a week because of that. Such pensioners are also facing hardship because of the substantial reduction in housing benefit. One of my constituents receives a total income of £54 a week, but he pays more than £10 a week for his housing as he is no longer allowed a rebate, arising from Government policy. No rebates are allowed on a works pension. Why should pensioners, many of whom fought in the last war and now live in such poverty, constantly be penalised as a result of Government measures?

Mr. Newton: It might have been more appropriate if the hon. Gentleman had sought to make a speech rather than an intervention. I shall resist the temptation to make another speech in reply.
From exchanges that the hon. Gentleman and I, and others, have had in the House in recent weeks and months, he well knows that he is generalising wildly when he implies that anything like his remarks could conceivably apply to pensioners as a whole. Their incomes on average—I readily accept that I am using averages—taking account of state social security benefits and the other sources of income have, according to the latest evidence, been rising about twice as fast as the incomes of the population as a whole. I readily accept that those are averages and not everyone has had the advantage of the improved occupational pensions and improved income from savings which have taken place under the present Government. Therefore, it is right to seek to direct additional resources to those who are least well off. That is precisely what the Government have been seeking to do—most recently with the changes made last October which, as the hon. Gentleman well knows, took additional help to about 2·5 million pensioners with the greatest needs either through income support or housing benefit.

Dr. Norman A. Godman: Presumably, one of the Bill's general aims is to improve the quality of service given to claimants and would-be claimants. Surely that would be most welcome, particularly in the light of recent Public Accounts Committee's report on poor quality of service given to claimants and would-be claimants. Has not the time come for the provision of an ombudsman to assess the kind of treatment given to claimants? May I remind the Secretary of State that I recently wrote to him about an investigation carried out by the parliamentary ombudsman into the appalling treatment given to a young pregnant constituent of mine? That case demonstrates the need for such a monitoring service.

Mr. Newton: We have had yet another almost separate speech, but I shall seek to respond in my usual helpful fashion. I readily accept—indeed, it was one factor in our minds when we carried through the major reforms of the system between 1985 and 1988—that some changes were necessary in the system's structure to enable us to deliver


anything remotely like an acceptable service. Whether we consider the speed or accuracy with which claims are processed or the shorter amount of time that people have to spend hanging about in DSS offices, it is clear that a substantial improvement is taking place. That is not to say that errors are not still made, but there is no good reason for departing from the current arrangements by which—as the hon. Gentleman implied—the ordinary ombudsman, if I may call him that, on the request of a Member, is perfectly at liberty to investigate maladministration by the DSS in respect of the payment of benefits, in the same way as in any other sector.

Dr. Godman: He is not.

Mr. Newton: If the hon. Gentleman says that the ombudsman is not, he must be quarrelling about the distinction between a policy matter and a matter of administration. We could get into a potentially endless argument about that. It would not be sensible to do so, as the Bill has relatively little to do with that. I shall seek to ensure that the hon. Gentleman receives a reply to his letter as soon as possible. However, we shall not gain too much by prolonging the argument now.
I compliment the hon. Gentleman on the actions of people, some of whom are possibly his constituents. There has been a dramatic improvement in the service provided to social security claimants in some parts of north London as a result of the removal of the processing of benefits from offices in north London to the new, central office in Glasgow which is performing extremely well. I visited it and was most impressed. I may say, on behalf of some social security claimants in England, that we are grateful for the effective efforts of some of the hon. Gentleman's constituents in Scotland who have helped us bring about the improvements that he wants.
My statement in the House on 25 October on the annual uprating of social security benefits gave a further clear illustration of our continuing desire to give real extra help to those disabled people in greatest need. The range of measures for long-term sick and disabled people that I announced at that time will increase spending by some £100 million a year and help about 500,000 disabled people and carers. Those changes include the extension of attendance allowance to disabled babies, the extension of mobility allowance to people who are both deaf and blind and a new carers' premium in income support and housing benefit. These measures have been widely welcomed, and they show also how the reformed system of income-related benefits can be used to focus additional help quickly and effectively on particular groups.
These measures, most of which will be in place by April, and all by October, are the first stage of a wide-ranging programme of action that seeks to improve the balance and structure of the benefits provided for disabled people. That programme was set out in the paper "The Way Ahead: Benefits for Disabled People", which my right hon. Friend the Minister responsible for the disabled and I laid before the House on 10 January.
The measures in the Bill represent the second stage in our programme. They abolish the attendance allowance six-month qualifying period in respect of terminally ill people. They introduce an age-related addition to severe disablement allowance. They end reduced earnings

allowance for new cases and they provide for the end of the accrual of further entitlements to the additional pension element of invalidity benefit.
The third phase of the programme, which, for purely practical reasons, will have to come in a later Bill, is to bring in two new benefits that will substantially improve the help given to disabled people—the new disability allowance and the new disability employment credit. The first will replace the existing attendance allowance and mobility allowance schemes for people under 65 and will extend help to less severely disabled people. The second will make it easier for disabled people to take up and stay in work. The only reason why we are not legislating in this Bill is because such significant changes in the benefit structure need a great deal of detailed work for which there has not yet been time. In pressing ahead with it, as we most certainly shall, we want to take account—this is welcomed on both sides of the House—of the views of interested organisations and individuals.
Thus, the four measures in the Bill are part of a wider strategy to improve the coverage of help with the extra costs of disability, to improve the balance and structure of benefits for disabled people who are unable to work, and in particular to do more for those disabled from birth or early in life, and to improve the help given to those disabled people who can and want to work.

Mr. Max Madden: Will the Secretary of State confirm that official figures show that there are about 6·5 million disabled people in this country? Will he also agree that the various measures that he has announced are, although welcome, extremely modest, and that on the highest estimate only 1 million disabled people, including carers will benefit from them?
Does the right hon. Gentleman agree that it would be wholly dishonest if he or anyone else pretended that the measures that he has announced represent a dramatic improvement in the standard of living for all the 6·5 million disabled people whose interests are at the heart of this debate?

Mr. Newton: Had I attempted to suggest in any way that these measures would benefit 6 million or more people in the way that the hon. Gentleman has described, I should have misled people. But, as I am sure he realises, the figures that he is talking about are derived from the substantial surveys set in hand by the Government and conducted over two or three years by the Office of Population Censuses and Surveys, which deliberately set a very low threshold—some organisations for the disabled think that it was too low—for the assessment of disablement. The surveys therefore covered large numbers of people who, it found, had little in the way of additional costs; and they included some disabled people who are in perfectly ordinary work and are quite as capable of taking part in everyday life as those who are not disabled.
I hope that the hon. Gentleman will recognise that I have not sought to oversell the substantial improvements that I have proposed. Equally, I hope that he will not seek to exaggerate the extent of the problem. The Government's proposals that I and my right hon. Friend the Minister of State brought forward on 10 January seek sensibly to address some of the main additional needs clearly revealed by the OPCS surveys.

Mrs. Margaret Ewing: rose—

Mr. Newton: I shall give way, but I am anxious not to turn this into a series of separate speeches.

Mrs. Ewing: The Secretary of State will recall that when the OPCS survey was commissioned the Government's Social Security Advisory Committee stated that this was an opportunity to revise the system with great precision to ensure that the disabled received the income that they required. Is he convinced that his proposals will reflect that statement? Disabled groups are very concerned that they do not.

Mr. Newton: The hon. Lady refers to the report published by the Social Security Advisory Committee in 1988 in advance of the committee seeing the main results of the OPCS surveys. That report made suggestions on which we have drawn extensively in developing the proposals that the Minister of State and I put before the House 12 days ago. I would not attempt to speak for the SSAC or to predict the comments that it will no doubt wish to make when it has had a chance to study the paper. I hope that it will recognise that we have drawn constructively on the suggestions that it put forward.
In particular, we have taken considerable account of the SSAC's view that perhaps the top priority, certainly one of the main priorities for additional help, is the group of people for whom the system does least at the moment. That is the group consisting of people who were disabled from birth or disabled very early in life and who have never had the opportunity to build up contributory benefits entitlement or occupational pensions or to make savings on which they can draw when difficulty occurs. That is undoubtedly the group for whom we do least at the moment and our proposals seek to do significantly more for them.
I now want to speak in detail about the clauses in the Bill. The House will recall that last summer we made a firm commitment to tackle the problems faced by terminally ill people who satisfy the eligibility criteria for attendance allowance, but who die before the six-month qualifying period is complete. Clause 1 honours that commitment and gives extra help for terminally ill people, and thus to their families and their carers. It does not just mean extra payments for attendance allowance of what will be from April £37·55 per week. It means extra payments of invalid care allowance and of income support or housing benefit via the disability premiums and the new carers' premium. The total cost is some £35 million a year. That proposal at least is welcomed by all hon. Members.
Clause 2 introduces an age-related addition to severe disablement allowance. I touched on that in reply to the hon. Member for Moray (Mrs. Ewing). That, of course, is a non-contributory benefit which is available to the long-term sick who have not paid the required national insurance contributions to qualify for invalidity benefit. That, of course, includes people who have never been able to work at all. Again I underline what I said to the hon. Lady. This group of people is one of our major priorities for additional help.
The measure will give people who become incapable of work before the age of 40 an extra £10 per week in benefit from next December. There will be a lower addition for those who become disabled later in life. That is exactly parallel to the current contributory invalidity addition that goes with invalidity benefit itself. The net additional cost

is expected to be about £16 million in 1990–91 and about £50 million a year thereafter. The gross additional cost is much larger.
The third measure relates to the industrial injuries scheme which presently provides for what is called a reduced earnings allowance for loss of earnings by people whose disabilities are caused by industrial accidents or diseases. The majority of recipients of that allowance who are not working are, however, receiving the normal long-term national insurance benefit—invalidity benefit—for those who are unable to earn as a result of sickness or disability. Clause 3 will remove this duplication by ending new—I underline "new"—entitlements to reduced earnings allowance after the autumn. Existing beneficiaries—this is why I emphasise "new"—are not affected by the change. Their entitlements, if continuous, will be preserved after the change, and uprated as at present.
Although the measure will, in due course, reduce expenditure below what it would otherwise have been, the effect will build up rather more slowly than the increases in benefit expenditure to which I referred a few moments ago. We expect the reduction to be about £1 million in 1990–91, £15 million in 1991–92 and about £40 million in 1992–93.

Ms. Clare Short: Was not that benefit originally intended for people injured at work who could continue to work but could not achieve the same level of income as they enjoyed before their accident? The benefit was intended to make up for someone's injury and to enable him or her to work for lower wages but still have a reasonable life. That opportunity for people who have been injured at work is now to be wiped out by the Government's actions.

Mr. Newton: We are seeking to direct attention to the general problem on which the hon. Lady touched with the new disability employment credit. I accept that the origin of the present arrangement, known until recently as the special hardship allowance—the name has now been changed—may be as the hon. Lady describes it, but it is also true that the majority of those out of work who receive the REA also receive the ordinary benefit that replaces earnings for those who are unable to work. There is therefore a degree of duplication which can be sensibly tackled in the context of our proposals.

Mr. Allen McKay: The special hardship allowance is paid to many people in the mining industry who suffer from pneumoconiosis, bronchitis and emphysema who have had to leave highly remunerative face work and move to light occupations because of their disease. Those people depend heavily on the special hardship allowance. Is the Secretary of State saying now that those who continue to work at reduced wages are to lose the benefit? If so, the proposal needs to be looked at again. Moreover, because the earning capacity of people who suffer from such diseases is reduced, their saving capacity is also reduced and they can no longer save as much for their retirement. The continuation of the special hardship allowance and REA has compensated for that to a certain extent. The Secretary of State will be doing a disservice to a lot of good, honest people by making this change.

Mr. Newton: The hon. Gentleman makes a point on behalf of his constituents. I have emphasised the principal reason why the Government have felt it right to introduce


the proposal. I should also remind the hon. Gentleman that, regardless of the existence of the reduced earnings allowance, those who suffer from certain prescribed diseases and experience industrial injury—according to the assessed percentage effect of their disablement—already receive substantial preferences, under the industrial injury scheme, over those injured domestically or in the course of their daily lives. In considering these matters, we have sought to consider the balance of provision among disabled people generally—I have never made a secret of that—and in that context, we think that the proposal is reasonable.

Mr. Allen McKay: Let me pursue the matter a little further. The compensation that is paid is not compensation for reduced earnings. The special hardship allowance and the reduced earnings allowance deal with that. Compensation is paid for the accident or the contracting of the disease if there has been negligence and according to the extent of disablement or disfigurement. That is an entirely different matter. If compensation were intended to make up for loss of earnings—as the Secretary of State implies—compensation payments would have to be considerably higher.

Mr. Newton: At least part of the hon. Gentleman's remarks may relate to proposals in another part of the Bill, concerning the balance between benefits paid and the amount of compensation awarded by the courts in an action concerning industrial injury that is judged to be the result of negligence by the employer. That separate matter is one on which my right hon. Friend will comment when he concludes the debate.
The last of the four measures relating to long-term sickness and disability benefits concerns the additional pension element paid with the main invalidity benefit. That benefit has three components. They are a basic pension with increases for dependants, the invalidity allowance which I touched on once or twice earlier, in the context of explaining how we extend it to the severe disablement allowance, and an earnings-related additional pension.
The Bill's provisions make a change affecting only the last of those three elements. Additional pension first became payable with invalidity benefit in 1979. The average payment currently is £9, incurring a cost of about £450 million a year. However, that commitment is growing rapidly and we estimate that by 1998, the average payment will be £21 at a cost of about £1·6 billion, which will continue to grow thereafter.
As I pointed out in my statement on 10 January, a continuing commitment on that scale would be likely not only to inhibit the very welcome growth of occupational sick pay schemes—now thought to cover more than half the population—but widen the gap still further between those who are able to work and those who are not. Such a commitment would take more and more social security resources to those who already enjoy good entitlements, do nothing for people never able to work or whose working life is cut short early, and make it increasingly difficult for any responsible Government to find resources to help disabled people with the greatest needs, as I have done—this relates to the remarks of the hon. Member for Birmingham, Lady wood (Ms. Short) —with the measure in clause 2 to pay an age-related addition with severe disablement allowance.
We want to ensure that we can, both now and in the future, place proper emphasis on the needs of people who most need extra help. Clause 4 provides that no new—and I emphasise again "new"—entitlement to additional pension with invalidity benefit will arise after the end of the 1990–91 tax year. From April 1991, all entitlement to additional pension will be assessed on earnings between 1978–79 and 1990–91. All existing rights up to that time will be preserved. Earnings will continue to be revalued, and 1 assure the House that the clause does not in any way restrict rights already earned or earned up to that time.

Mr. Michael Meacher: What is the Government's best estimate of the total cumulative saving from the abolition of the additional pension over future years? Why is it that although a benefit of substantial cost to the state is to be abolished, there is no equivalent reduction in national insurance payments?

Mr. Newton: The answer to the hon. Gentleman's question will become clear when I come to the national insurance fund. I have not sought to disguise any figures, and I shall not do so in respect of the information for which the hon. Gentleman asks.
As with the reduced earnings allowance, the change to additional pension will reduce expenditure—but quite slowly, building up from £5 million in 1992–93 to about £100 million by the middle of the decade and about £350 million by the end of it. It is important for the House to recognise that, despite that reduction, total expenditure on such additional pensions with invalidity benefit will continue to grow rapidly, from £450 million now to more than £1·3 billion by the turn of the century.
Incidentally, because invalidity allowance—the age-related addition to invalidity benefit which remains unchanged—is reduced by any entitlement to additional pension, invalidity allowance will for many people replace to some extent entitlement to additional pension.
The complete package of measures, including the two new benefits on which we are working, will give extra help—this picks up the figure mentioned by the hon. Member for Bradford, West (Mr. Madden)—to an estimated 850,000 people. The total net effect by 1993–94, even allowing for the measures I have just commented on to restrain future growth, will be to add some £300 million to the total costs of the benefits we pay to the disabled and their carers. That is over and above the money we will pay on account of inflation or any increased demand.
Because of the relatively slow build-up of the effect of what we propose on additional pensions, the result of the package as a whole is to make expenditure on the long-term sick and disabled higher than it would otherwise have been in every remaining year of this century.

Mr. Meacher: I have listened extremely carefully, but the Secretary of State has not answered my question. Will he now tell us what the total cumulative saving to the Government is, over future years, for the abolition of the additional pension?

Mr. Newton: The hon. Member, quite reasonably, asked a long series of parliamentary questions immediately after my statement about disability benefits. I have the answers here. The hon. Gentleman also has the answers. My right hon. Friend the Minister of State went to some trouble to ensure that the hon. Gentleman had the answers before this debate.
I have stated the effects on expected expenditure on additional pension between now and the end of the century. The hon. Gentleman knows from answers that he has been given—it was implied in my earlier remarks—that those effects continue into the next century. The reduction of expenditure on additional pension with invalidity benefit by 2015—some far distant time by which many things will have changed—compared with what would otherwise have taken place if the current commitments for the future had remained unchanged, will be in excess of £1 billion.
I shall give the hon. Gentleman the credit of suggesting that he has not sufficiently considered what I said about the consequences of continuing to make commitments—we had some of the same argument on what I shall call main SERPS—about what a generation of taxpayers and contributors will be prepared to do in 2015. Their form may or may not be honoured. At that time, demographic trends may be at their worst.
It is not certain that a future generation will be able to honour such commitments. As long as they remain unchanged and we continue to make long-term promises about what future generations of taxpayers and contributors will be asked to do, it is increasingly difficult to add additional commitments to current expenditure—as I have tried to do to help disabled people today—because those commitments would be piled on top of long-term commitments.
It would be difficult—I would say impossible—for any responsible Government to make the short and medium-term improvements I am making if we had not taken action to restrain the scale of the uncertain promises that are being made for the future. I make no apologies to the House for that. It is the responsible position for a Government to adopt when considering these matters.

Mr. Meacher: The practicality of SERPS is at the heart of the debate. It is, for the Opposition, a point of principle that SERPS offered far and away the best pension provision for this country—provision that the present Government have destructively undermined.
How does the Secretary of State justify his argument that SERPS was not a practical scheme, given that this country spends about 7·5 per cent, of its national income on state pensions, while in the free-market United States the figure is 8 per cent, and in Germany and France it is as high as 14 per cent? How can the right hon. Gentleman possibly say that SERPS was wildly extravagant or that it was not viable, which it clearly was?

Mr. Newton: The hon. Gentleman is trying to rerun some rather old arguments dating back to social security measures of 1985 and 1986.1 accept that looking ahead 40 or 50 years involves a huge range of uncertainties, not least economic uncertainties; those measures, however, set out clearly the reasons—including demographic trends—for doubting whether it was sensible to continue to make commitments affecting future taxpayers and contributors on the scale represented by SERPS.
I do not think that the hon. Gentleman's comparisons with the position in other European countries take us very far. At present, those countries do not match our structure of support for retired people, which has for a long time included substantial provision for occupational pensions.
We need to think in terms of total provision for those in retirement, and in that context the hon. Gentleman's comparisons are misleading.

Sir Peter Hordern: The comparisons offered by the hon. Member for Oldham, West (Mr. Meacher) are not valid, because provision for occupational pensions is just as extensive in those countries as it is—increasingly—here. What does my right hon. Friend think of the proposal that the retirement pension—for which the Government are responsible—should be increased in line with either prices or earnings, whichever is the greater? What would have been the cost of implementing that policy over the past 10 years?

Mr. Newton: The cost would have been substantial. The last Labour Government, who implemented such a policy, proved incapable of sustaining it. In the middle of their time in office, they had to fiddle about with the uprating mechanism, which saved some £1 billion at current prices—at pensioners' expense—because they found that they could not live with the consequences of the formula that they had promoted so strongly.
What is more, there is no doubt that an attempt to pursue such a policy would have serious inflationary consequences, thus damaging one of the key factors in the improvement of recent years in pensioners' living standards—the increase in the real return on their savings. As I have told the House numerous times, the available information suggests that—almost unbelievably—pensioners' income from savings actually fell under the last Labour Government. Under the present Government that income has risen sharply, and has contributed significantly to the improvement in their living standards.

Mr. Frank Field: Will the Secretary of State confirm that under the last Labour Government the real value of the old-age pension rose by 20 per cent., while under the present Government it has risen by less than 3 per cent? The poorest pensioners had a much better deal under Labour.

Mr. Newton: Pensioners as a whole have done significantly better—

Mr. Paul Flynn: On average.

Mr. Newton: All right, on average. We are now rerunning exchanges that have taken place on numerous occasions in recent weeks. It can be said, as a broad generalisation—although, as I have always accepted, it is not true of every individual case—that pensioners have done significantly better as a result of various features of what has happened under the present Government, including the improvement in savings income, the greater value of occupational pensions which has resulted from reduced inflation and our measures to price-protect faithfully the basic retirement pension.
I have acknowledged clearly on many occasions—indeed, it is reflected in Government policy—that not all pensioners have benefited to the same extent and, in particular, that older pensioners who tend to have less savings because they retired at a time when there was less prosperity or because they have less entitlement to occupation pensions, have not benefited from those general trends as others have done. But, as the hon. Member for Birkenhead (Mr. Field) argued last week in a newspaper article, by which I was quite struck, the logic of


that is not that we should go down the path of the wholesale, massive increases that the hon. Member for Oldham, West is advocating, with their inflationary consequences, but that we should focus help on the less-well-off pensioners, as the present Government have been seeking to do.

Mr. Frank Field: Perhaps I will be able later to develop the ideas that I expressed in that newspaper article—[Interruption.] No I am not making a speech: I am making an intervention, and if hon. Members behind the Minister keep interrupting, it will take longer.
The Secretary of State's point is that, under this Government's price protection, the real value of the old-age pension has risen by 3 per cent., whereas in a much shorter period, under a Labour Government, it rose by 20 per cent. When the Minister talks about pensioners without savings or occupational pensions perhaps he should remind the House that those people represent about 45 per cent, of all pensioners.

Mr. Newton: The essential point, on which I hope that there will be some community of view between the hon. Gentleman, who takes a close interest in these matters, and myself, is that the average total net income of pensioners rose by 3 per cent, under the last Government, whereas it has risen by 23 per cent, under the present Government. Part of the reason for that is that the approach that the Labour Government adopted to public expenditure as a whole, including social security expenditure, generated rates of inflation that decimated large parts of the income of pensioners as a whole.

Mr. Jeremy Corbyn: Does not the right hon. Gentleman recognise that nearly three quarters of single women pensioners do not have access to occupational pension schemes and that often they do not have access to savings? Does he not agree that over the past 10 years, under this Government, the breaking of the link between the state old-age pension and average earnings has made those people £13·10 a week worse off than they would have been had the link been maintained in 1980? Of course it was callously broken by the Government of which the Minister is a member.

Mr. Newton: No, I do not accept that. Those people, too, would have suffered, perhaps even more harshly, from maintenance of the sort of inflation—[Interruption.] The hon. Member for Ladywood ought to remember that even the present rate of inflation, which the Government have indicated clearly is higher than they would wish, is barely more than half the average rate of inflation that we experienced in the latter part of the 1970s.

Ms. Short: Will the right hon. Gentleman give way?

Mr. Newton: My normal instinct is to give way, and I will think about giving way to the hon. Lady after I have had an opportunity to complete my reply to the hon. Member for Islington, North (Mr. Corbyn). I think that that would be better than allowing intervention to pile upon intervention.
I have already made tbe first main point that I wanted to make to the hon. Gentleman. The other point, of course—and here I am not endorsing his figure of three quarters, or whatever it was—is that many single women pensioners, especially those who might be described as always having been single, rather than widows who may be entitled to an

occupational pension arising from their husband's entitlement, may well be less likely to have the sort of extra provision from which so many pensioners have benefited. Consequently, of course, there will be a disproportionate number of such people among those helped by the measures that we have taken, most recently last October, to steer additional support to the over-75s and the more disabled pensioners by way of increases in income support and consequential increases in housing benefit.

Miss Emma Nicholson: Will my right hon. Friend give way?

Mr. Newton: Yes, I shall give way to my hon. Friend, but so that I do not cause any unnecessary aggravation, perhaps I should give way first to the hon. Member for Ladywood.

Ms. Short: I am grateful to the Secretary of State for giving way. I should like to put two points to him. The first, which he has completely ignored, is that if we sustain our rate of economic growth at just over 2·5 per cent., our national income will double every 20 years. Therefore, when the Secretary of State says that we cannot afford in the future better pensions or better payments to people with disabilities, he is saying that, relatively, those people will get worse and worse off while our income doubles every 20 years. That first point is extremely important, because it wipes away many of the points that the Secretary of State made earlier about what we can afford for pensioners and for people with disabilities.
My second point relates to inflation. The Government constantly tell fibs about the old economic statistics. They inherited a rate of inflation of about 8 per cent, at a time when inflation across the countries of the Organisation for Economic Co-operation and Development was massively higher than it is now. The Government then doubled that rate by doubling the rate of VAT. They took inflation up and squeezed the economy, causing enormous suffering. They then took inflation down until, with the silly Lawson boom, inflation is now up again. The Government's record on inflation is not a fine one. We now have a problem with inflation although we have had the benefit of North sea oil. The Government should not boast about that.

Mr. Newton: I shall make only two points in response to the hon. Lady. First, she will have to do a great deal more detailed work before she can show that the previous Government's record on inflation was better than that of the present Government, which is to fly in the face of all reality.
Secondly, if—as I should certainly expect in view of the expected continuation of the present Government in office—we were to maintain our success in generating more rapid economic growth than we have over recent years, that would make a whole lot of things easier. However, what is equally true is that if the dismal record of the last Labour Government had been maintained, it would be extremely difficult to maintain the commitments that we have already made, let alone those that the hon. Member for Oldham, West wishes to pile on top.

Miss Emma Nicholson: Does my right hon. Friend agree that the last few interventions by Opposition Members display the extreme paternalism and old-fashioned attitudes of the Opposition? After all, most women now enter the professions and earn occupational pensions. On top of that, our introduction of portable


pensions means that pensioners no longer have to be dependent on the state. Do the Opposition welcome these moves or do they want to keep us all as permanent beggars?

Mr. Newton: I am not quite sure whether the Opposition welcome the moves or not—perhaps the hon. Member for Oldham, West will enlighten us on that when he speaks. However, I certainly welcome the trends to which my hon. Friend has referred, but at the same time I recognise the point that the hon. Member for Islington, North made. Quite a lot of women who are already retired—and especially older women—have not had the advantage of those trends and we are rightly seeking to concentrate on them some of the additional help that we can give.
In a way, these exchanges lead me naturally into the second main theme of the Bill, which is occupational pensions. We are building on the platform that we have established in recent years with changes that have encouraged people to make proper financial planning for their retirement, and have given them greater choice in deciding what is best for them in their particular circumstances. Individuals have responded—the success of personal pensions is just one indicator of that. In my view at least—I recognise that this is a matter of some controversy to the hon. Member for Oldham, West who will no doubt return to this point when he speaks—a more stable and sustainable pensions structure has been created, in which a larger part of provision over and above the basic state retirement pension will be firmly founded on people's own savings while in work, not on Governments today making commitments that the taxpayers and contributors in 30 or 40 years' time may or may not be able to fulfil.
The Bill covers a number of miscellaneous technical amendments to existing occupational and personal pensions legislation. It also provides for a number of significant measures designed to give greater protection to the members of schemes. I announced last November that we would be taking specific legislative action to respond to the recommendations of the Occupational Pensions Board in its report "Protecting Pensions". This report followed a request to the board from my right hon. Friend the Member for Croydon, Central (Mr. Moore) to look at a number of issues relating to the balance of interests of employers and scheme members, and the involvement of schemes in company mergers and takeovers. I should like to pay tribute to the board for its work. The Government have accepted the vast majority of its recommendations, and our proposals have been widely welcomed. Their general thrust is to improve the benefit security, the information and the help available to scheme members.
For some pension scheme members it has come as a painful awakening in recent years that the takeover or merger of their company has resulted in a sharp reduction in the value of the pension they expected to receive. Not only did they enjoy the full value and security of pension rights built up over a number of years; they also had expectations of discretionary increases off top. Instead they can end up with a pension based on the lower salary that they had when their original scheme was wound up. Only part of that is protected by revaluation each year. That, as I have made clear, is no longer acceptable. We are,

therefore, proposing that revaluation should be applied to the whole of the preserved pension rights of future early leavers, not just that fraction accumulating after 1985. That will help not only people affected by takeovers and mergers, but those who change jobs. The preserved pensions of all members who become early leavers after the appointed day will be covered. The value of the pension rights above the guaranteed minimum pension level will be revalued until they come into payment in line with price increases, or by 5 per cent, per annum, if that is less.
In addition, we are introducing a further obligation to revalue benefits when a scheme is wound up. Sufficient resources will have to be provided to revalue all present and future pensions in payment in line with price increases up to a maximum of 5 per cent, a year. Any deficiency in the scheme assets necessary to meet those liabilities are to count as a debt on the employer. It has been suggested by some organisations representing employers and pension funds that that could be an undue burden on some employers and schemes. I am, of course, willing on this as on other matters to listen to specific problems that are raised, but I believe that the Government's proposals are a sensible and measured step forward which will greatly improve protection for ordinary scheme members. We are also providing for the appointment of an independent trustee in certain circumstances. That can be only beneficial in ensuring that the interests of both employers and members are taken into account.
The Bill also includes measures to restrict self-investment where pension funds own any assets in companies to which they relate. We think that it is important to spread risks and equally important to remember that the prime purpose of those pension schemes is to provide a good retirement income, not to improve the company's financial position. If a pension fund invests in the company to which it relates, failure of the company leads to double jeopardy, both for employees' job prospects and for their pensions at the same time. In general, our antipathy to that being allowed to happen is widely accepted. Concern has been expressed about the position of small self-administered pension schemes. Those are schemes with fewer than 12 members, often directors of a small family concern which, since their institution, have been accustomed to the opportunities, within Inland Revenue rules, for a certain degree of investment in the related company. It was forcefully argued to me that, in those cases where the shareholding directors and trustees make poor investment decisions, the double risk is for their own jobs and pension prospects rather than those of other people, and that different considerations therefore applied. As I made clear to the House in an answer shortly before Christmas, I have accepted the validity of that argument, and we therefore intend that, where small self-administered schemes consist only of controlling directors, they should be excluded from the proposed self-investment restrictions.
Clauses 7 and 8 of the Bill are concerned with providing a better service for the individual members of schemes. I believe that the introduction of a pensions ombudsman is a major step forward. Although assistance is already available from various sources such as the occupational pensions advisory service, there is a clear need for a mechanism to provide a straightforward method of redress for consumers' problems. Individuals will have free access to the ombudsman and schemes will have to abide by the decisions given. A tracing registry should also assist many


people to track down where past pension rights may be held. On both those issues we are continuing to talk to the pensions industry about how to provide the best possible service to consumers.

Mr. Tim Smith: Will my right hon. Friend give way?

Mr. Newton: I am conscious of the fact that I have been speaking for the better part of an hour and that I am in danger of trenching unduly into the time available to other Members. [Interruption.] I give way to my hon. Friend.

Mr. Tim Smith: I am grateful to my right hon. Friend for giving way. The explanatory and financial memorandum states:
The public expenditure effects of Clauses 7 and 8 are still under consideration.
Will my right hon. Friend explain how the ombudsman and the register will be funded?

Mr. Newton: To a significant extent, apart from details of the arrangements, that issue is under consideration. We hope that the industry will join us in providing this important underpinning for people's confidence in the industry. We are having discussions on that matter.
When I said to my hon. Friend the Member for Beaconsfield (Mr. Smith) that I wanted to make progress, I thought that I heard some mutterings among the Opposition to the effect that they would all have retired by the time I finished my speech. It is right therefore to observe that the principal cause of the length of my speech has been my willingness to give way to Opposition interventions. On the one occasion when I sought to make progress by not giving way, the hon. Member for Ladywood, no less, expressed some concern at the idea that I was not prepared to offer her the same opportunity that I had offered others.
Clauses 11 and 12 concern the administration of the national insurance fund and arrangements for the collection of contributions. As the House will know, the Government Actuary has recently produced his annual report on the state of the fund. It shows that the fund will remain well above his minimum recommended level during the next financial year, but that the balance will fall. That reduction in the fund's surplus is the result of a number of factors, including most notably the major reduction in national insurance contributions worth £3 a week to the great majority of contributors, which took place in October last year at an annual cost of between £2 billion and £3 billion, and the success of our personal pension initiative, since, of course, such pensions attract contracted-out rebates in the same way as occupational pension arrangements generally, under the arrangements introduced by the previous Government.
Personal pensions have proved very popular. We introduced them at a time when the number of people in occupational schemes had remained virtually static for about 20 years. Many people who wanted to make additional provision for their retirement had no ready means of doing so. Now over 3·5 million have opted for the personal schemes. We welcome that unreservedly. The change has enhanced the choice available to individuals in a way they have manifestly welcomed and helped significantly towards the wider objective of getting people to think further ahead about provision for retirement than has traditionally been the case.
Although this means more income forgone by the national insurance fund in the short term, it reduces the burden on the state earnings-related pension scheme in the longer term. As I have said, despite the reduction in contributions, which was generally welcomed, and the very encouraging response to personal pensions, there is no immediate problem. In the present year, the expected balance in the fund, at 34 per cent., is over twice the actuary's recommended minimum. Next year, at 25 per cent., it will still be far in excess of the minimum.
We need, however, to ensure that the balance stays healthy in the years further ahead, and clause 11 does so in a way which could well be argued to be sensible in any event, by simply removing from the fund three benefits that are not related to national insurance contributions and are, therefore, more properly paid out of general taxation.
The benefits in question are industrial injuries benefits, statutory sick pay and statutory maternity pay. As the House is well aware, entitlement to national insurance benefits depends on an individual's contribution record, but that is not the case with these benefits. To receive industrial injuries benefit, the only requirement is that the claimant has been in employment. Statutory sick pay and statutory maternity pay depend on an earnings test and not on the need to satisfy particular contribution conditions; thus, for instance, married women and widows who have actually opted not to pay contributions in full are nevertheless entitled to receive SSP or SMP. It is, therefore, more appropriate for these benefits and their administrative costs to be met from general taxation rather than from the contributions of those paying for the national insurance system. The national insurance fund, in our view, should concentrate on the proper contributory benefits, and clause 11 provides for that to be done.
I should make it quite clear to the House that this change does not in any way alter the present or future benefit entitlement of any individual. It will not affect the way these benefits are administered by the Department. It will not affect the current arrangements whereby employers recoup the cost of statutory sick pay and statutory maternity pay from their national insurance contribution payments. We will simply ensure that the national insurance fund will be reimbursed from general taxation.

Mr. John Battle: How much will the right hon. Gentleman's Department lose in income as a result of the 2 per cent, bribe for people to move out of the SERPS into private pension schemes?

Mr. Newton: The amount paid out in the current year for commitments in the previous year is £500 million. It is a small part of the total change that is occurring in the balace of the national insurance fund. With respect to personal pensions, the overwhelming bulk is not the incentive to which the hon. Gentleman referred but contracted-out rebates, which have been part and parcel of the system since they were introduced by the Labour Government in the late 1970s. Because of the growth of personal and occupational provision, contracted-out rebates are a longer-term addition to the income forgone by the fund, rather than the incentive to which the hon. Gentleman referred, which, in any case, is due to come to an end.
I am not trying to dismiss the point made by the hon. Member for Leeds, West (Mr. Battle), but it should be understood that the incentive is a relatively small part of the change. This should be put in the context of a fund that has an income and outflow of roughly £30 billion a year.
The one significant effect of the clause will be on the finances of the national insurance fund. In the first full year, the fund will gain overall by about £1·9 billion—although, of course, the overall financing of benefits will be unaffected. We see this as a straightforward and sensible rationalisation. It also represents prudent housekeeping for the fund.
Clause 12 concerns the arrangements for national insurance contributions. It introduces provisions which mirror the Inland Revenue legislation contained in the last two Finance Acts to streamline tax collection by encouraging prompt payment. It provides for a system of penalties for late national insurance contribution returns and for interest charges on late paid contributions. I hasten to assure the House that the arrangement is even handed: the Bill also provides that the Secretary of State should pay interest to employers who are owed refunds on their contributions.
The last main point on which I need to touch is clause 10, which gives powers to my right hon. Friend the Secretary of State for Energy to introduce a new scheme of grants towards the cost of insulation measures in low-income households. The new scheme of grants will build on the success of the community insulation projects and the current home insulation scheme. It will, however, go beyond what they have achieved. As the House will be aware, the community insulation projects began in 1982 as part of the community programme. Over 700,000 low-income households have benefited from that scheme. However, with so many fewer unemployed people—which hon. Members on both sides of the House will welcome—we can no longer rely on a training programme for the unemployed to deliver this valuable national service. The projects need now to be developed into fully fledged local business.
The clause does no more than give an enabling power to my right hon. Friend to make regulations governing the new scheme. These regulations will set the detailed framework for the new arrangements.

Ms. Short: No new money.

Mr. Newton: If the hon. Lady is muttering, "No money." I draw her attention to the financial part of the explanatory and financial memorandum which shows that the expenditure is expected to be about £12 million in 1990–91.
I know that my right hon. Friend wishes to consult widely before those regulations are laid and will be issuing a consultative document on the scheme very shortly. He hopes to do that—I am sure that hon. Members agree that that is proper—before the clause is discussed in Committee, in order to assist the discussion which will, no doubt, take place there and which, from the sound of it, the hon. Member for Ladywood will seek to illuminate.
I shall not seek to take the time of the House by going at length into the more minor and technical provisions of the Bill, although, of course, my right hon. Friend the Minister of State will seek to respond to any points that are

raised when he speaks at the end of the debate. However, I shall draw attention to one provision, tucked away in paragraph 16 of schedule 5, which, although modest, will, I believe, be warmly welcomed. This provision will extend statutory maternity pay to service women on the same basis as for other women.
The Bill is designed mainly to carry forward the process that we have embarked on to give a better balance to the system of disability benefits. It also makes important and valuable changes to the operation of occupational pension schemes and makes a sensible rationalisation in the scope of the national insurance fund. It will further improve both our social security system and the strength of wider provision for retirement, and I commend it to the House.

Mr. Michael Meacher: After listening to what must be a speech of record length from the Secretary of State, I refer to the long title of the Bill. It begins:
The Bill makes a range of amendments to the law relating to social security".
After such a marathon speech, one might have expected that either the Bill or the Secretary of State would have dealt with some of the key outstanding priorities in social security. I submit to the House that in at least four areas urgent action is needed now. On all of them there is a deafening silence in the Bill and they were scarcely mentioned by the Secretary of State. Nothing has been said about the almost 2 million pensioners living on or below the poverty line who have increasingly fallen further behind during the past 11 years. Nothing has been said about the social fund fiasco, the young homeless scandal or the child benefit freeze. Therefore, my first point is simply that the Bill signally fails to tackle the major issues that urgently need attention.
What does the Bill deal with? In his usual amicable way, the Secretary of State made a modest presentation of his proposals. He has a lot to be modest about. As he said at some length towards the end of his speech, the main purpose of the Bill is to give more security to members of occupational pension schemes. The other side of the coin, about which he ostentatiously said nothing, is that Government policy takes away security from members of SERPS, which, I submit, is a much better scheme. Even in respect of occupational schemes, the proposals will do little or nothing to stop employees being cheated of their pension rights.
Let us take as an example the proposal on early leavers, which is central to the Bill. At present only pension rights built up after 1985 are revalued in line with prices, up to a limit of 5 per cent. The Government now propose that all preserved pension rights will be uprated by the same formula—only up to 5 per cent. That is an improvement as far as it goes, but it does not go very far. The average rate of inflation over the recent historic period has been, not 5 per cent., but 10·2 per cent. It is currently 7·7 per cent. In other words, the Government have offered to uprate the pension rights of occupational scheme members at a mere half of the historic rate of inflation. As pensions are nothing more than deferred pay—at least that is the Opposition's view—that is like saying to one's employees, "I am going to give you a pay increase this year of 3·8 per cent—half the current rate of inflation." That would not


go down well with the ambulance men, with the Ford workers or with Lord King who gave himself a pay rise last year of 11·6 per cent.

Mr. Madden: Or with us.

Mr. Meacher: I am coming to us. That would not go down well with hon. Members, including Tory Members who cheered the Secretary of State's announcement as if it was a bonanza for the pensioned classes. They would not accept it for a moment, not even for one year, let alone for the 20, 30 or 40 years proposed in the Bill. My point is not simply a debating point but an important issue of principle. Why should employees, who are compelled by law to contribute from their gross incomes to pension schemes, be forced meekly to watch that part of their earned income whittled away by increases at only half the rate of inflation? Employees would never put up with that formula in respect of their current pay. It is a form of legal expropriation—I choose those words advisedly—to allow employer controlled pension schemes to extract earned income from employees and then reduce its real value.

Mr. Tim Smith: Does the hon. Gentleman appreciate that private sector occupational pension schemes are voluntary and that when the Occupational Pensions Board examined the issue in 1981 it said that there should be some ceiling, because otherwise the commitment is open-ended? His proposal is wholly retrospective and could go back many years in the case of a long-serving employee. The hon. Gentleman proposes a huge new cost for employees in the future. They are the people who will have to pay.

Mr. Meacher: Indeed, I appreciate that. However, employees deserve their pension rights. It is a disgrace that pension schemes with funds that currently total over £50 billion are indulging in contribution holidays rather than meeting their prior obligation to their employees.
There is a serious political point here. We are constantly told about the benefits to Sid from privatisation. In pensions, the disbenefits from privatisation are absolutely enormous. SERPS and most public sector occupational schemes, including the scheme for Members of Parliament, offer full inflation-proofing of pensions. The hon. Gentleman and every hon. Member in the Chamber should bear in mind that they will have the advantage of full inflation-proofing. Virtually no private sector scheme provides that. That is not a minor matter. Cumulatively over the years it has a huge impact, not only on the value of the pension achieved on retirement, but on the remainder of the person's life, which might last another 20 years or more.
It can be argued that the income losses from most private occupational schemes—let alone from personal private pensions, which I shall come to later—far outweigh any income gains that individuals may have received from all other forms of privatisation put together.

Mr. James Cran: The hon. Gentleman is entitled to make the point that index-linking in occupational schemes is not as high as he would like. Will he also make it clear that the contributory pension scheme for hon. Members has a contribution rate of 9 per cent., whereas the average rate for occupational schemes is of the order of 5 per cent.? He is saying to the work force that if it wants index-linking it will have to pay for it and pay for it severely. The hon. Gentleman has not made that clear.

Mr. Meacher: The hon. Gentleman's figure is not right. Contributions are on average somewhat over 5 per cent. and I shall give some examples later. Certainly, index-linking would not require significant increases in contribution rates when there are huge and growing fund surpluses. The hon. Gentleman must face that. The trustees of pension schemes do not have a divine or unmitigated right to that money. It is owed to the employees who contributed to it in the first place.

Mr. Cran: Will the hon. Gentleman give way on that point?

Mr. Meacher: I want to get on. The hon. Gentleman can make his own speech.
The Secretary of State says that the Bill provides more protection to occupational scheme members, but it is rather like a car insurance policy that excludes crashes. According to the consulting actuaries, R. Watson and Sons, if his formula had been in operation over the past 20 years a pensioner retiring in 1989 who left the scheme 20 years ago would have found the real value of his pension rights reduced by more than 60 per cent. That is a telling figure. That is the acid test. It reveals the pathetic inadequacy of the so-called protection in the Bill for what it is.
I want to be open about this and tell the Secretary of State that the Labour party will not accept the formula. When we come to power we shall ensure a proper level of protection for early leavers. That means that we shall require pension rights to be uprated each year by the full rate of inflation. That is not an unreasonable requirement for schemes when surpluses currently top £50 billion—that figure is not even the most recent and the sum may well be significantly more—and when many companies have recently declared extended contribution holidays for themselves. To require anything less is to cheat employees of a significant part of their entitlement to their deferred pay.
There is another major weakness in this part of the Bill. It does nothing to ensure that occupational pensions maintain their value in payment after retirement. It is a scandal that some, not many, private sector schemes make no increase in pension after retirement.

Mr. Christopher Hawkins: Hear, hear.

Mr.Meacher: I am glad to have support for that point.
The same actuaries have shown that some people who retired in 1969 would have found the real value of their pension reduced in those circumstances to a mere 15 per cent. of its original value. The Bill will do nothing to stop what is little more than legalised robbery.
Even where private schemes guarantee increases, and most do, it is normally at the low level of about 3 per cent. That is only one third of the average rate of inflation for the recent historic period. That is completely unacceptable. In our view, pensioners should have the first call on the surplus of a scheme until the real value of their pensions has been restored fully. Then it should be maintained annually.

Mr. Hawkins: Hear, hear.

Mr. Meacher: I am glad again for support for that point. It is important. Perhaps the hon. Gentleman would like to have a word with his right hon. Friend. The Bill lamentably fails in that necessary requirement.
We reject the Government's view that it is sufficient to urge employers and trustees as a matter of good practice to price-index pensions up to 5 per cent. a year. Because company pension schemes are in a healthy financial position and companies continue to enjoy contribution holidays—a position which could last several more years—

Mr. Cran: Will the hon. Gentleman give way?

Mr. Meacher: I shall not give way now because I am making a point.

Mr. Cran: rose——

Mr. Meacher: I shall give way in a moment.
We shall table amendments in Committee calling for the full inflation-proofing of occupational schemes. I say advisedly to the right hon. Gentleman—perhaps I anticipate the point that the hon. Member for Beverley (Mr. Cran) seeks to make—that it would be far better to offer companies an escape clause to cut pension payments in conditions of real economic crisis than to continue at a time of sustained profitability grossly to underpay pensioners on the grounds that occupational schemes cannot accept an open-ended commitment to inflation-proofed pensions.
For the same reasons we criticise the Bill because it does nothing to stop employers declaring unilateral contribution holidays for themselves while making their employees continue to make contributions from their pay. The British Aerospace scheme, for example, is in surplus to the tune of £300 million. Recently the employers declared a two-year contribution holiday for themselves, yet they continue to require their employees to contribute 6 per cent. from their pay.

Mr. Tim Smith: We do the same.

Mr. Meacher: I am not sure whether the hon. Gentleman is asking what is wrong with that.

Mr. Smith: I am not.

Mr. Meacher: I am glad that the hon. Gentleman is not. It is manifestly unjust that employees should have to contribute towards their deferred pay when employers do not.
The GKN scheme is in substantial surplus and a three-year contribution holiday was declared from 1988. Yet pensions in payment are being uprated only by 5 per cent., which is less than two thirds of the current rate of inflation. The Manufacturers Hanover Trust company scheme, a major banking scheme, has already had four years of contribution holidays which are expected to continue for another three to four years, yet pension rises are not indexed and increases are discretionary.

Mr. Cran: Does the hon. Gentleman recognise that the surpluses of a pension fund can be given away only once, yet the whole point of a pension scheme is to take obligations for liabilities for a long period? That being so, is he not oversimplifying the case and duping employees who happen to be members of a pension scheme by telling them that they can get something for nothing when they cannot?

Mr. Meacher: The hon. Gentleman, who, before he came to the House, had a position with the CBI, seems to be a spokesman for the pensions industry. It would be helpful if the pensions industry, which has substantial and still growing funds, recognised its proper responsibility to those who made the contributions in the first place.

Mr. Newton: I am sorry to prolong this, but the hon. Gentleman made an important statement. If I understood him aright—I should be grateful if he would confirm whether I did—he said that he would prefer to impose by legislation fresh obligations on occupational pension schemes along the lines that he suggested, but at the same time make legal provision for the schemes not to meet those obligations if circumstances became difficult. If the hon. Gentleman did not say that, he certainly talked about conditions of economic crisis. I do not know how he would define them. If what he said had any meaning, I understood him to say that he would impose new obligations on schemes now because conditions look good —because of nearly 10 years of a good Government—and would give them powers to welsh on or reduce those obligations if conditions became difficult. I am not sure that that would be welcomed by occupational pensioners.

Mr. Meacher: The Secretary of State must explain how he can justify surpluses continuing at their current enormous level without full inflation-proofing being provided.

The Minister for Social Security (Mr. Nicholas Scott): Answer the question.

Mr. Meacher: I am

Mr. Scott: The hon. Gentleman is not.

Mr. Meacher: That is what I am proposing. I accept that there could be conditions of real economic crisis—I used those words advisedly—when in some cases it might be impossible for those schemes to meet their obligations. In that limited and marginal case I am prepared to accept that there may be an exception. The vast majority of schemes will not be in that position and they should be given proper standards. There should be a proper benchmark for their obligations. There is none now and there is none in the Bill. That is not fair or right.

Mr. Newton: I shall not seek to intervene again as I do not want to prolong the hon. Gentleman's speech unnecessarily. There will be a great deal of interest, however, in what he has said. When he speaks of conditions of economic crisis, does he mean a broad, generalised crisis affecting the economy or would his dispensation clause let out a particular pension fund that got into difficulties, which is a much more likely eventuality? Often such funds are connected with particular firms. What the hon. Gentleman is seeking to do is to encourage all sorts of hopes and to impose all sorts of commitments on funds to make additional payments at the moment, because things happen to be good, but those commitments would not be worth the paper they were written on as soon as things got less good. That is fundamentally irresponsible.

Mr. Meacher: The right hon. Gentleman has a nerve to say that what I am proposing, which is widely understood to be reasonable and perfectly viable, is something that occupational schemes somehow could not manage. He is


simply not addressing himself to the size of the current surpluses, which, at £50 billion, represent one-ninth of the entire national income. Those surpluses are colossal. For the right hon. Gentleman to use weasel words about the inability of such schemes to meet those obligations shows a craven feebleness and an unwillingness to accept responsibility on behalf of employees.

Mr. Cran: rose—

Ms. Primarolo: rose—

Mr. Meacher: I shall not give way again to the hon. Member for Beverley, but I shall give way to my hon. Friend the Member for Bristol, South (Ms. Primarolo).

Ms. Dawn Primarolo: Perhaps we should turn my hon. Friend's comments round the other way so that the Minister understands them. I understand my hon. Friend to say that where a pension fund has a surplus it is unreasonable for the employer to have the option to suspend his contribution while compelling the employee to continue to make his. The employer, by suspending his contribution, is spending the surplus to his advantage now instead of paying out from that surplus in the future to the people who contributed to the scheme.

Mr. Meacher: My hon. Friend is right. This is a pipsqueak of a Bill as it allows employers and trustees to go on paying miserly increases in pensions, below the rate of inflation, when pension schemes are in massive surplus. Even then it allows employers—

Mr. Cran: rose—

Mr. Meacher: I shall certainly not give way to the hon. Gentleman for a third time—he can make his own speech. I have answered his point at considerable length and if he had a better point to make, I might consider giving way again.
It is not acceptable to allow employers to go on making small increases to pensions, below the rate of inflation, when pension funds are in such enormous surplus. Even then the Bill allows employers and trustees to stop contributing to their funds without consultation. The Labour party believes that that is the opposite of good practice. We shall instead require occupational schemes to meet full inflation-proofing targets and so we shall place a ban on employers' or trustees' unilateral contribution holidays to ensure that they do so.

Mr. Hawkins: I agree with much of the hon. Gentleman's speech. Many funds have allowed employees who have retired in the past to be grossly ripped off by inflation. It is possible for everyone to be offered an index-linked pension and it is possible to invest in index-linked bonds.

Mr. Tim Smith: At what cost?

Mr. Hawkins: I do not care about the cost. I look forward to the day when everyone will be offered the choice of investing in an index-linked pension rather than taking up the absurd Mickey Mouse offers from insurance companies. Such offers speak of £65,000 at the age of 65, but one has no idea whether that £65,000 will be worth 4p or £1 million as that pension is not indexed for inflation. Everyone should have an index-linked pension.

Mr. Meacher: I am glad that at least one Conservative Member is knowledgeable enough and, with genuine

respect to the hon. Gentleman, brave enough to make that intervention. He is absolutely right that index-linked bonds are one way in which to achieve the desired result.
If it is impossible for occupational pension schemes to manage inflation proofing—the minimum requirement of a good pension scheme—people should reconsider whether SERPS is a better system in terms of providing minimum guarantees in retirement. That system guarantees full inflation-proofing as well as many other important benefits, for example, allowing women to choose the best 20 years of their working lives as the basis for their pensions—at least that is how Labour left it.
The second major issue in the Bill concerns disability benefits. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) will be dealing with this matter in more detail on Wednesday in our Supply day debate. The Secretary of State said that the provisions for the disabled had been widely welcomed, but that must be another Government euphemism, meaning that the provisions have been widely attacked by the disability organisations. The over-trumpeting of the proposals is matched only by their modesty. After 10 years of waiting and six reviews from the Office of Population Censuses and Surveys, churning out more and more information, all the Government have brought forth is a mouse. The proposals were heralded as a comprehensive review, but they represent a narrow tinkering with existing provision without any radical reassessment. Despite overblown claims of substantial new money being available, we are talking about old recycled money, even without the cuts in the package that drain that money away.

Mr. Peter Thurnham: I am not sure when that 10-year period began. If the hon. Gentleman is referring to the period since the Conservative party has been in government, payments to the disabled have increased at a far greater rate than they were ever increased under the previous Labour Government. What does the hon. Gentleman mean by a 10-year wait?

Mr. Meacher: I am rather surprised that the hon. Gentleman should seek to draw attention to this as it is embarrassing to the Government.
Ten years have elapsed since the Government made a commitment in 1979 to improve benefits for the disabled. Between 1979 and April 1989 there has been a cut in the value of almost all disability benefits—the disabled have been forced to wait 10 years for a mouse. First, the Government said that they needed to be sure that the economy could bear such benefit improvements. By 1984 they said that they were satisfied by the rate of economic growth, but they then said that they needed more information. They set up six OPCS studies, which have now reported, but, as a result, we have got a feeble set of proposals.
There is a huge hole in the middle of the Government's review as it omits the two thirds of disabled people who are elderly, including many of the severely disabled. The Government believe in targeting on those in greatest need, but obviously only as long as it is cheaper to do so; and if it turns out to be more expensive, they ignore that need. As a result, the needs of seven out of every eight disabled people have been neglected by that so-called comprehensive review.
The Bill proposes an age-related addition to the severe disablement allowance. Any increase in disability benefits is welcome, but the additions are small and, regrettably, the right hon. Gentleman has not followed the advice of his Social Security Advisory Committee to raise progressively the rates of SDA to the level of invalidity benefit. The new addition does nothing to remove the inherent discrimination in SDA against people who have never been able to pay national insurance contributions, particularly those disabled from birth. Worst of all, most disabled people on SDA are also on income support. The increase that they will receive in severe disablement allowance will simply be offset by an equivalent cut in income support. That is one of the many examples of recycling contained in the package.
The cost of the new benefit is estimated by the Government to be £50 million in 1992–93. But they also calculate that that will be offset by savings on other means-tested benefits for the disabled of £65 million in 1993–94. Therefore, even with this, the disabled will make a net loss.
The right hon. Gentleman's disability statement two weeks ago was more than an exercise in the mysteries of semantics than a guide to the Bill. He said then that the net extra cost of the package would be £300 million by 1993 and all the extra money was new. I can only assume that the right hon. Gentleman is into his Alice-in-Wonderland phase in which words mean what he says they mean. By any normal dictionary definition of new, none of the so-called extra money is new.
In his statement on 10 January the right hon. Gentleman told the House:
The extra provision for the first three years…has been included in the totals for my Department published in the Autumn Statement."—[Official Report, 10 January 1990; Vol. 164, c. 943.]
In other words, it is within the existing budget.

Mr. Newton: I am trying to resist the temptation to intervene, but I cannot when the hon. Gentleman seeks to place on record points that are manifestly misleading. He must know that the Autumn Statement is the outcome of prolonged, sometimes difficult, discussions between Ministers and the Chief Secretary to the Treasury. The result of the discussions was an agreement between the Chief Secretary to the Treasury and me, endorsed by the Cabinet, to increase expenditure on long-term sickness and disability benefits to the extent embraced in the Autumn Statement. That does not mean that it is not new money, but that we did not advertise it to the world until the Autumn Statement was made. It will be clearer when the White Paper on public expenditure is published at the end of the month.
I cannot allow the hon. Gentleman to mislead the House and therefore, while I am on my feet, I shall explain that the hon. Gentleman was given an answer last Friday on the severe disablement allowance invalidity addition, in which it was made absolutely clear that the £50 million which I said will be spent is net of savings on income-related benefits. If he looks at the answer he was given, he will find that the gross expenditure is £115 million and the net expenditure is £50 million. No one is seeking to disguise the fact that there will be an offset. Equally, he should not disguise the fact that there is an increase in expenditure on severely disabled people.

Mr. Meacher: The right hon. Gentleman seeks to make the point that because the expenditure was mentioned in the Autumn Statement—about which he had already issued a lengthy statement, press notice and departmental brief—when he announces it again, we should assume that when he says that it is new money it really is new money. However, it has already been announced. We have heard for the third time today about the content of the Autumn Statement. He repeated his announcement at the start of his statement on 10 January and repeated it again today —that is the third time. He is talking about exactly the same money which has already been announced. There is absolutely nothing new here.
If there is any genuinely new money, it will be swamped by three major cuts in disability benefit in the Bill. By far the most important is the abolition of the SERPS additional pension to invalidity pension, about which we have already had some exchanges. Disabled people have waited patiently for 10 years for the long-promised improvement in benefits. Frankly, the right hon. Gentleman should be ashamed that the centrepiece of his review is a massive cut which will save the Government £350 million by the end of the century. I tried to make this point earlier: it will save a great deal more because the Government's document, "The Way Ahead: Benefits for Disabled People" states that by 1998 the cost of the additional pension will still be £1.6 billion a year.
Will the right hon. Gentleman comment on the fact that one estimate shows that the eventual saving to the Government from the Bill will amount to no less than £3.5 billion cumulatively over future years, at the expense of disabed people? If that is the result of a review designed to improve benefits for one group in poverty, I only hope that the right hon. Gentleman will treat the other groups to a long period of benign neglect.
The Government's reasons for the destruction of this valuable benefit are instructive. Astonishingly, the right hon. Gentleman repeated them today without any apparent embarrassment. Paragraph 6.8 of "The Way Ahead: Benefits for Disabled People" states that the continuation of the additional pension
would have been likely not only to inhibit the growth of occupational cover but also, through the constraints inevitably imposed on Government's ability to do more for those with no such entitlement, to have widened yet further the gap between those who have been able to work and those who have not.
In other words, if everyone cannot have it, no one shall have it. That is the classic argument of a Government who prefer to level down rather than up.
The Government's other pretext is no less contemptible. They say that the benefit will inhibit the growth of occupational schemes. There we have it: it is more important for the Government to promote private sector insurance than to leave in place good, existing benefits for disabled people.
The Government's explanation for getting rid of the reduced earnings allowance—another cut in the Bill—does not bear looking into either. They have said, and the right hon. Gentleman repeated it today, that it overlaps invalidity benefit. That is surely to misunderstand the purpose of industrial injuries benefits which are intended to be compensation benefits, not income maintenance benefits. I suspect that having ended 90 per cent. of industrial injuries entitlements, through the Fowler review


of 1986, the Government have fastened on the pretended and small anomaly as an excuse to pave the way for the ending of industrial injuries benefits.
There is no coherent or comprehensive restructuring of benefits, as the right hon. Gentleman likes to claim, merely a rehash of existing provision, with small extensions, but enough camouflage for a substantial cost-cutting exercise. If only the organisations for the disabled had been consulted. However, it is no accident that they were not. The review was published on 10 January without any invitation to comment on its contents and complete with a timetable for its implementation. The very next day the Social Security Bill was published executing phase 1 of the proposals. To go from White Paper to Bill in one day, after a wait of 10 years, is simply to give the most insulting confirmation that the Government wish to avoid, at all costs, any input from the people most affected. It is a tragedy that this component of the Bill is such a huge missed opportunity.
The present framework of disability benefits is a patchwork of disconnected, uneven and jumbled rights. It desperately needs an integrated structure that coherently combines cover for extra daily living costs with a flexible allowance according to either partial or total working capacity. Sadly, in the Bill there is no vision, no sense of measured steps towards a final objective, no sign of the comprehensive disability benefit which is urgently needed.
I do not blame the Government for failing to bring forward such a ready-made benefit at one go. However, I roundly condemn them because, after 10 years in which they have not even uprated existing disability benefits in line with prices, let alone earnings, they have failed to show any signs of ever having any intention to move towards such an integrated benefits system. For that, we cannot forgive the Government.
On behalf of the Labour party I pledge that we shall introduce a new and comprehensive disability benefit which will provide assistance with the extra costs of disability matched to the degree of disability. It will also supply a guaranteed income, without a means test, for disabled people of working age who cannot obtain employment because of long-term illness or disability.
For those who can work, the cost element of our new benefit will not be means tested and will not be withdrawn if a person obtains work. When the earnings of those able to return to work are insufficient to meet their basic needs the new disability benefit will supplement their income. We want disabled people to participate in and make their fullest contribution to society, and we have the vision and the drive to bring that about. If the Tory Government will not bring it about, we shall.
The third and last main element of the Bill concerns the proposed new grants for home insulation and for advice on energy efficiency for low-income households. There was a gaping hole in the Secretary of State's comments on this matter, too. He did not tell us how large the grants would be; what the total funds available will be; how much of the £12 million that he mentioned will be merely transferred from other budgets; and how much will be new money. Nor did he tell us whether the new money is once again Department-speak for no new net money, and merely a euphemism for clawback.
I warn the right hon. Gentleman that, early in the new post, he is already earning himself a dangerous reputation for laundering social security money, with sleight of hand and hidden juggling his specialities. On this occasion he

has chosen selective silence to protect himself. He did not say a word about the fact that the Government's enforced switch in 1988 from community programme to employment training has caused the number of draughtproofing jobs carried out to plummet by 34 per cent. He did not say a word about the fact that the Local Government and Housing Act 1989 abolished the 95 per cent. grant to local authorities for roof insulation and draughtproofing for low-income households; and he said not a word about the fact that, with 5.5 million low-income households estimated to have no draught-proofing, it will take 45 years at the current rate of progress to provide them with this minimal protection. As most of those in such households are elderly, I suspect that not too many are likely to live to see the benefit—or is this another recycling device to reshuffle the costs on to the next world?
There is no overall theme to the Bill; it is more like an exercise in filling holes in the dyke. The background to the Bill, about which the Secretary of State never breathed a word, is that Government policy is increasingly splitting that dyke open all over the place. It is ironic that this is called a Social Security Bill, given that the one recurring characteristic of Government policy in this area is the production of insecurity.
Nowhere is this more glaring than in pensions. The Government inherited SERPS, which had all the virtues of a first-class pension scheme. It offered very low administration costs, job mobility, comprehensive inflation-proofing and maximum security in old age. Nothing in the private sector can equal this combination of advantages.
The Government tried to abolish SERPS, and when they found that politically impossible, they hobbled it. Then they introduced personal pension schemes which are expensive to administer and which offer no security because, being money purchase schemes exposed to the vagaries of the stock market, investors have no idea of what benefits their contributions will eventually buy.
Then, to encourage people to take a flutter on their retirement, the Government offered a 2 per cent. bribe which has now cost a cumulative total of £1.5 billion, and then forced other national insurance contributors to pay for it. Despite this huge subsidy, a high proportion of the 3.5 million people who have gone on a personal pension gamble will end up with grossly inadequate pensions. It is sheer humbug for the right hon. Gentleman to claim that he is improving protection in pensions when every major act of the Government's pension policy has undermined the long-run financial security of millions of people in our country.
Insecurity is the hallmark of Government policy in other areas that are also conspicuous by their absence from the Bill. The Prime Minister likes to claim that hers is the party of the family, but how can 7 million mothers feel security about their budgeting when the Prime Minister has frozen child benefit for three years running so that it is now worth 14 per cent. less in real terms than in 1979? How can those on the lowest incomes feel security when the social fund is grossly underfunded by the Government and now exhibits refusal rates that top 60 per cent? How can young people obtain security of getting a job when the denial of all benefit rights has turned thousands of 16 and 17-year-olds into an itinerant army of cardboard-box outcasts, unable to get a job until they have a place to stay and unable to get a place to stay until they have income from a job?


This is a patch-up-and-mend Bill which tackles none of the fundamental insecurities plaguing the lives of millions of our poorest citizens, many of them caused directly by the Government's policy. It is like a medical insurance policy that tidies up a few minor administrative anomalies but neglects to provide cover against all the major illnesses. That is why we shall reject the Bill's feeble ineffectiveness in the Lobbies tonight.

Sir George Young: I support the reforms outlined in the Bill, which I know will be warmly welcomed by Conservative Members. The hon. Member for Dagenham (Mr. Gould) adopted a policy that was appropriate for a Labour Front-Bench spokesman last Thursday; when repeatedly pressed for his policy on local government he chose to say nothing. Today, the hon. Member for Oldham, West (Mr. Meacher) adopted another policy, which was to come up with a commitment that I had never heard before on the future index-linking of pensions. When that policy and commitment are analysed, it may turn out that the hon. Member for Dagenham chose the right approach.
There are two sets of reforms in the Bill, one dealing with pensions, the other with the disabled. At the end of the Bill there are also some useful reforms which are basically tidying-up measures.
I greatly welcome the additional protection afforded by the pensions ombudsman. As responsibility for pensions shifts away from the public to the private sector, as the sums involved become much larger and as the whole subject becomes more complex it makes sense to institute the protection given by an ombudsman to those with pensions, especially as this has been tried and found successful in many other parts of society.
I noticed that the building societies ombudsman, who was not initially included in the Building Societies Bill but was added in Committee, was funded by the building societies. This Bill provides that the Secretary of State will pay for the pensions ombudsman. Why is one criterion applied to building societies and another to pensions?
Schedule 3 gives the Secretary of State power to help organisations such as the occupational pensions advisory service. I very much hope that this opportunity will be taken to give it more resources to strengthen its network throughout the country of advisers who give independent advice to people with pension problems.
As hon. Members who have received a briefing today from the Consumers Association will know, that body hopes that the ombudsman will publish his report. It has been helpful in other areas and I see no reason why such an obligation should not be placed on the pensions ombudsman. I hope that that suggestion will be added to the Bill in Committee.
I welcome the additional rights for early leavers. Of course, I understand that an employer will wish to use his pension fund to retain his staff and dissuade them from leaving. However, it seems that there is a countervailing national interest in job mobility. A healthy economy is a changing one. It has to respond to new demands and new technology, and it would be wrong if penalties for early leavers were to pull too hard in the opposite direction, as

they do at the moment, and inhibit the essential job mobility that the economy needs. I understand the objections of the CBI, and I do not agree with them.
The Government's proposals are much more modest than those advanced by the Opposition. Against the background of most pension funds, the relatively modest extra insurance included in the Bill is such that a well-run pension fund should be able to take it in its stride. A growth rate of 5 per cent. seems a fairly modest target.
I welcome the change of approach by my right hon. Friend on small self-administered pension schemes. I never understood why it was proposed to prevent an SSAP investing in the firm's own freehold, when that might have been a secured loan, while allowing it to invest in somebody else's freehold without any security at all. The change of heart contained in a parliamentary answer before Christmas has been well received by small businesses for which the pension fund has often been a useful source of funds.
I welcome the pension changes in the Bill because they go with the grain of increased reliance on the private sector while underpinning that with useful extra insurances such as the ombudsman and the funding for independent organisations. One cannot ignore the disappointment expressed by many voluntary organisations about the levels of benefit for the disabled. However, one needs to distinguish between the levels of benefit and the new structure. Benefits can be increased. As my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) said in an intervention, the Government have an excellent record on increasing benefits, far better than that of their predecessors. I hope that the debate in Committee and in the House will concentrate on the structure of benefits rather than on the level. Good progress has been made, but we must still try to make the structure more streamlined, simplified, user-friendly and comprehensible.
I am returning to social security matters after a gap of some 10 years and I have been struck by their growing complexity. Hon. Members find the subject complex and so will the disabled. I hope that we can look again at the income of carers. Caring Costs, an organisation which I think has been in touch with most hon. Members, has outlined a number of improvements, many of which involve little structural change but involve increasing the level of benefits. Some of us serving on the Committee considering the National Health Service and Community Care Bill will want to see how the structure of benefits in this Bill interrelate with the implementation of Griffiths, which the Committee is about to discuss. It is important that the philosophy outlined in Griffiths is made reality by any social security reforms that are going through in parallel.
I welcome the provisions in clause 1 for the terminally ill. I understand that they will help about 58,000 people. The explanatory memorandum shows that almost 275 more civil servants will be required to administer the provisions. That implies that each employee in the Department will process one case a day, which seems to be a low level of productivity. Perhaps I have misunderstood, but we need an explanation of why so many staff are needed.
The theme running through the reforms for the disabled, coupled with other announcements, seems to be that work is now a real option—more of an option than it was for the disabled. That is partly because the economy is picking up and there is a demand for labour, partly as


a result of changes made by employers to make their premises more adaptable for the disabled, and partly as a result of changing expectations about the role of the disabled. The Bill seems to tidy up the interface between income in work for the disabled and benefit out of work, and it removes any perverse incentives not to seek employment.
My hon. Friend the Member for Broxbourne (Mrs. Roe) may deal with clause 10 in more detail because she had direct responsibility in the Department for administering the home insulation scheme. That scheme combines wholly worthwhile objectives, such as training the unemployed, saving energy and helping those on low incomes to keep warm. Local newspapers have pictured hon. Members posing with a roll of insulating material under one arm and a pensioner under the other before insulating the loft.
There has been some uncertainty about the future of the home insulation scheme and I am delighted to read that Neighbourhood Energy Action, whose work in this field I commend, has been involved. I welcome the fact that my right hon. Friend the Secretary of State proposes to consult before finalising the scheme, as was demanded of him by the hon. Member for Oldham, West. I hope that as soon as the consultation is over, we can put that type of scheme on a firm footing because it has been an outstanding success.
The reforms outlined in the Bill are balanced, realistic, prudent and carefully targeted and I have no hesitation in commending them to the House.

Mr. Jack Ashley: I intend to touch on some of the points of the hon. Member for Ealing, Acton (Sir G. Young), to whom the House always listens with great interest. The Secretary of State is one of the most respected members of the Government, but his Bill lets disabled people down badly. The best way to judge the proposals is from the reaction of disabled people themselves and, of course, from the reactions of organisations for the disabled. They are furious about the provisions in the Bill and feel insulted.
I do not know whether the Secretary of State saw Professor Townsend's letter in today's issue of The Independent. It is a fine letter by a great authority on disability. It is careful, authentic, logical and well reasoned. Writing on behalf of the Disability Alliance, Professor Townsend speaks for many millions of disabled people. I am glad to see that the Minister has the letter.
Disabled people have waited patiently—too patiently —for the implementation of the 1979 Conservative party promise of a coherent disability income. All that has emerged are these pathetic proposals which will help 850,000 disabled people out of a total of 6.5 million identified by the Office of Population Censuses and Surveys. The Bill will help only 13.5 per cent. of the disabled population. In addition to those disabled people there are 6 million carers. They were mentioned by the hon. Member for Ealing, Acton and identified in a general household survey in 1985.
The proposals will cost £300 million, and that money has been filched from other parts of the benefit system. The Minister knows that. The money will come largely from child benefit and from industrial benefits. My hon. Friend the Member for Barnsley, West and Penistone (Mr.

McKay) was right to complain about hitting industrial benefits. When the Secretary of State was originally making his statement, I put a point to him and I make no apology for repeating it. The £300 million to help disabled people is minuscule compared with the £23 billion given in tax cuts to top earners. I know that the Secretary of State's Department is not responsible for tax matters, but the Government as a whole have given that disproportionate increase to top earners and only £300 million to the disabled. That means that disabled people are denied the benefits of economic growth.
In his foreword to the booklet "The Way Ahead" which, in many ways, is the foundation of the Bill, the Minister of State said that attitudes towards disabled people are changing. He was right. I welcome that, and I know that he does, too. But the attitudes of disabled people are also changing. Disabled people will no longer passively accept such shabby treatment by the Government, and I believe that disabled people are shabbily treated. They are not asking for luxury; they are not even asking for compensation for their disablement. All that they want is an equal chance to participate in society and a reasonable amount of help from the Government.
In addition to their disability, the biggest burden that disabled people have to bear is that of special costs. I am dismayed that the Secretary of State has not provided for adequate help with extra costs. The Bill could have provided him with a marvellous opportunity to do something about it. That help has been the demand of disabled people since I entered the House in 1956, when Megan du Boisson began campaigning with the Disablement Income Group. That marvellous, fragile, disabled woman, who was a great campaigner, explained then that disabled people needed provision to help them with those extra costs.
What are the extra costs? What does a severely disabled man or woman require? Special heating is imperative. Special diet is vital. Laundry needs to be done. Severely disabled people cannot get out to shop around and shop economically. Many disabled people need unprescribed medication. In addition to those problems, they face the difficulty that they cannot save money by undertaking do-it-yourself repairs and so on. All those items add to the costs borne by disabled people, and none of them is covered by the Bill. That is a failure on the Government's part.
The needs of severely disabled people far exceed those documented by the Office of Population Censuses and Surveys. It would appear from the DIG's survey that the costs of some disabled people are eight times higher than those documented by the OPCS. The Minister is looking somewhat askance at that estimate, but it is the estimate that I prefer. The DIG survey said that many of the disabled people interviewed had described their financial position as "just scraping by" or "permanently in debt". Many severely disabled people are suffering in great debt or living on the margins of poverty as well as bearing the burden of their extra costs. They need very generous provision from the Government. All severely disabled people need that extra help, and they have simply not been given it. I hope that the Secretary of State can be persuaded to think again as the Bill proceeds through the House.
I echo the point made by the hon. and respected Member for Ealing, Acton. The question of the cost of


caring has been raised in the House on many occasions, and it should become one of the major disability issues of the next decade. The Government have done no more than to tinker with the cost of caring, and have failed to deal with the implications of the present unacceptable burden on voluntary carers. I think that carers are among the nation's most exploited people. The Government have failed to provide for them adequately. That failure means that millions of carers will feel embarrassed because they are doing a job without adequate financial provision. Millions of disabled people will also feel severely embarassed because they do not want to have relatives looking after them who are not being helped adequately. They are being given some help at present, but it is not enough. The relationship between millions of disabled people and their carers will be distorted. These are serious issues and the Government are doing nothing substantial about them. I hope that the Secretary of State will reconsider.
The flimsy nature of the Bill can also be seen in the omission of any help for the 4-2 million elderly disabled people. The growing number of elderly people will swell the total number of disabled people in the future.
Like the hon. Member for Ealing, Acton, I shall make a short speech because so many hon. Members want to speak. I conclude, therefore, by saying that I believe that this Bill is a failure because it does not deal adequately with the major problems of the severely disabled. The 1990s should bring major advances for disabled people, especially given the promises that the Government have made. This Bill makes no such advances. It is a midget of a Bill that takes very limited steps. Disabled people are furious with it. What we now need are gigantic steps to take disabled people, with fresh hope, into the 1990s. No such steps have been made and I regret that the Government have not risen to the occasion.

Mrs. Marion Roe: I support the Bill. I congratulate the Government on introducing further measures that will help the sick and disabled people and improve the quality of life of older people. I fully agree with many of the points made by my hon. Friend the Member for Ealing, Acton (Sir G. Young) so I shall not waste the time of the House by repeating his arguments in support of the Bill.
I particularly welcome clause 10, which will allow for grants to improve energy efficiency in low-income households. For many years, energy efficiency has been the Cinderella on the world political scene. Depending on the political and economic circumstances of the time, saving energy has been either at the top or at the bottom of the political agenda. Following the energy crisis of the early 1970s, Governments around the world became overnight converts to energy efficiency, spurred on by the fear that the West would be held to ransom by Arab oil sheiks and by somewhat apocalyptic forecasts of how long oil reserves would last. Energy-saving measures became the order of the day.
The collapse of the Organisation of Petroleum Exporting Countries and real falls in oil prices changed all that, but although the economic incentive for energy saving was not as strong in the 1980s as it was in the early

1970s, Britain's energy-saving record in that decade was exemplary. As early as 1985, the International Energy Efficiency Office contrasted the vigour of Britain's efforts to conserve energy with stagnation elsewhere. For the past 10 years, our rate of improvement in energy efficiency has been more than twice the average for the European Community.
Much more remains to be done. Each year, Britain consumes about £40 billion worth of energy. That is equivalent to about one tenth of our national income. Potential savings of about £8 billion still exist, according to the Energy Efficiency Office of the Department of , Energy. Such savings could add substantially to industrial competitiveness and significantly improve living standards.
Energy efficiency is not just a matter of economics, however, crucial though savings may be. We are beginning to appreciate the environmental consequences of energy consumption. Although it would be naive to expect the industrialised world dramatically to cut back energy consumption overnight—however attractive such a notion may be to Green party supporters—energy consumption will have a heavy burden to bear over the next few years in the process of reducing environmental damage.
Energy efficiency not only makes economic sense but is an environmental imperative. I warmly welcome clause 10, for there could be no better time to introduce an insulation scheme to help low-income households. As my right hon. Friend the Secretary of State said, the Energy Efficiency Office's community insulation project has helped to insulate more than 700,000 homes, mostly those of pensioners. The new scheme should help to increase further take-up of basic insulation by lower-income households. I am glad to note that both tenants and owners in the public and private sector will be eligible.
Given the sustained and substantial fall in unemployment that we have seen over the past three years, reliance on the unemployed in implementing insulation schemes should be reduced. I hope that the new scheme will have as one of its aims the encouragement of smaller businesses providing insulation services. Such work could easily be undertaken by one or two-man or woman firms, which would offer the prospect of self-employment to the unemployed. The existence of local firms providing the required services could stimulate demand from households that are not eligible for Government assistance. When the details of the scheme are filled in over the coming months, I hope that consideration will be given to encouraging smaller firms.

Dr. Godman: In my constituency, many home insulation schemes are effectively and efficiently implemented by community businesses and tenants associations, as well as by small firms.

Mr. Roe: When I was a Minister in the Department of the Environment, I saw a number of such schemes in operation, and I agree that they were most effective and that local input is extremely helpful. Nevertheless, there is always room to supplement them with the services of small firms.
I hope, together with my hon. Friend the Member for Ealing, Acton, that the Department of Energy will consult Neighbourhood Energy Action over the mechanics of the


scheme. That organisation has an excellent record in energy conservation and its expertise should be brought to bear in designing the new scheme.
I hope that my right hon. Friend the Secretary of State can reassure the House that eligibility for the scheme will not be drawn too tightly. It would be a pity if, in trying to target help at those on the lowest incomes, the scheme missed householders who cannot afford the full cost of insulation. The savings to be made from the individual and for the nation from home insulation projects are rapid and proven. I believe that energy efficiency will prove to be the very best environmental investment. The scheme will also bring greater comfort and warmth to lower-income households.

Several Hon. Members: rose—

Mr. Speaker: Order. The opening speeches both from the Government Front Bench and the Opposition Front Bench were lengthy—no doubt because the Secretary of State and the hon. Member for Oldham, West (Mr. Meacher) were frequently interrupted. I appeal to Back Benchers in all parts of the House to continue making brief speeches so that as many other right hon. and hon. Members as possible can be called. If speeches are limited to 10 minutes, it will allow the Chair to call every right hon. and hon. Member who has indicated a wish to participate.

6.4

Mr. Archy Kirkwood: In following the speech of the hon. Member for Broxbourne (Mrs. Roe) I cannot resist the temptation to remark that, though I appreciate her interest in energy conservation and that home insulation is of prime importance to low-income families in particular, she will understand if I do not accept that home insulation is the most burning social security issue confronting the country. That point was also made most ably by the hon. Member for Oldham, West (Mr. Meacher).
I also remind the hon. Lady that, whereas housing construction statistics for 1986 show that 400,000 home insulation schemes were completed, the figures for the June 1989 quarter show that the number had fallen to 11,000. I could quote other statistics to illustrate even more forcefully that the trend is going in the wrong direction. Therefore, I hope that the hon. Lady's campaign among her own right hon. and hon. Friends to improve home insulation will meet with success.
I share the disappointment expressed by other Opposition Members about the Bill, which can best be described as a ragbag of different measures. As a former solicitor, albeit only a Scottish solicitor, I begin with a plaintive plea on behalf of people who will have to make some sense of the legislation. Social security schemes are already complicated enough, and the intention now is to introduce not only huge chunks of disability legislation —though even that is not as extensive as it should be—but also new measures embracing pensions and energy matters.
The Minister for Social Security has been a member of the Department long enough to be able to tell his officials that he refuses to use social security Bills as a vehicle every year to sweep up any bits and pieces of legislative proposals that may be lying around the Department at any given time. The Minister would be better advised to go

along the road of introducing a disability statute, a pension statute, and so on. That would be a more orderly way to make progress.
As to the inevitable arguments over what is and what is not new money, although I take a close interest in social security matters, I was hoodwinked by the Secretary of State's statement on 10 January concerning the Government's new document, "The Way Ahead: Benefits for Disabled People". On that occasion, the right hon. Gentleman mentioned a figure of £300 million, but I did not understand at the time that it embraced £100 million already announced in his uprating statement. I do not say that the Secretary of State deliberately misled the House, but I was certainly temporarily hoodwinked, and care must be taken to avoid such confusion in future. It is not easy to make sense of expenditure levels, and it will be helpful if Ministers bear that in mind.
One bone of contention has for some time been whether any increased expenditure is the consequence of increased take-up or of improved rates of benefit. Agreement among hon. Members on both sides of the House on the true figures would place in context the real improvements that the Government have made. The Minister may take a different view, but I am not convinced that increased take-up, welcome though it is, is something that the Government can crow about, given that the benefits concerned are something to which claimants have a statutory right. Perhaps the Minister can say something about the balance between take-up and expenditure.
The Bill's provisions for the disabled appear to leave pensioners behind. As the hon. Member for Oldham, West said, there is an underlying implication in several recent changes that that is being done. While I appreciate the advice of the Social Security Advisory Committee that progress should be made in respect of the disabled who are still in work or who are of working age, there is genuine anxiety that we are ignoring the problems of people over retirement age. We tend to mention average pensioner incomes, but there are single women pensioners in my constituency who have not had an opportunity to build up a pension entitlement and they are paying for it now with real financial hardship. Their plight must not be forgotten.

Ms. Short: Perhaps the hon. Gentleman would appreciate my putting some figures on the record. Two thirds of pensioners are women, because women live longer, and three quarters of them depend on means-tested benefits. They are the poor pensioners.

Mr. Kirkwood: That is a helpful and succinct intervention.
I pay tribute to the work of disability pressure groups which inform all our debates. They are most worried about the opportunities presented by the report of the Office of Population Censuses and Surveys being missed. This is a unique opportunity, but it seems that it is to be lost. Everybody has been reining in the temptation to make more strident and urgent representations about disability to the Government recently. Since 1986, and the announcement of the review which I supported, we have held ourselves back. Now we have a glossy document and precious little else. The opportunity for a full review with proper consultation over a long time looks as though it is slipping away.
I recognise that there has been a three-phase approach. First come the uprating improvements, which were


welcome. Secondly, we have the improvements which are announced in this Bill in clauses 1 and 2. They, too, are welcome. Thirdly, with the move towards a disability allowance, unless it includes resources to meet the true costs of disability, it looks as though the opportunity will indeed be lost. If it is lost, the Minister will never be allowed to forget it. He should not be allowed to forget it.
There is scant regard in the Bill for the plight of carers. I know that there is to be a debate on that subject later this week. The part played by carers seems, by implication, to have been ignored by the Government in the Bill and in their long-term proposals as laid out in "The Way Ahead: Benefits for Disabled People".
I listened with interest to the exchange about surpluses in occupational pension schemes. I am worried about them, too. The Government will have to tackle them. I cannot for the life of me understand why the Bill is not an appropriate vehicle to do that. I agree also that index-linked pensions in occupational schemes are the way forward. I hope that we shall move in that direction. The Government cannot stand idly by and do nothing about the gross surpluses that are being built up in some schemes.
I am also worried about changes in the national insurance fund. I was unhappy to have my fears confirmed by an article in the Financial Times today. I should be obliged if the Minister would say something about that. The article reports that the Government originally budgeted for some 750,000 people to leave SERPS, but the latest estimate is that 4 million will have left by the end of April. That is only the beginning. According to some estimates, if the promotions continue, some 7 million people will eventually opt out. That is two thirds of the original SERPS membership.
The consequences of the move are proving extremely expensive to the national insurance fund. The cost of contribution rebates has risen, according to the Financial Times, from £792 million in 1987-88 to £1.5 billion in 1989-90. Incentive payments, the so-called bribes, have soared from £346 million to £615 million. The article reports:
Overall the fund will have lost nearly £5 billion in the three years to next April. Costs are likely to escalate because more people will leave SERPS and because contribution rebates and incentive payments are linked to earnings.
I remember saying, when they were introduced, that I was much more relaxed about personal pensions than the official Opposition, but I said with some vigour that the Incentive payments, or bribes, were unnecessary. If the figures I have quoted are anything like true, that is certainly the case. They represent a substantial sum of money that could be used on disability or pension benefits, which would be a far better way in which to use them.

Mr. Tim Smith: Will the hon. Gentleman give way?

Mr. Kirkwood: No. I want to conclude my speech.
The revaluation of pensions on winding up schemes is something of a worry for the industry. I have received representations from the industry, and I require some satisfaction that revaluation will be done in a way which will not prove literally to be an incalculable burden on some pension schemes.
There have been exemptions on self-investment for small self-administered schemes, but I am told that some 20 per cent. of such schemes will nevertheless still be

caught. I would like the Minister to find time to say something about that. Is it necessary to have the 20 per cent. director rule, the "nem con" vote, and for each director to be a member or trustee of the pension scheme? If so, dozens, if not hundreds, of small firms in knitwear and other industries in my constituency will be prevented from recycling pension funds when there are cash flow problems. That would be a severe curb on their business activity.
The Bill is disappointing both in the short term and in the long term. More than anything else, however, the Government's attitude towards consultation does not augur well for the future of the social security system.

Mr. William Hague: I am grateful for the opportunity to speak so early in the debate, and, like other hon. Members who have spoken, I undertake to be relatively brief.
Like my hon. Friends, I have enjoyed all the contributions that we have heard so far, but I think that we were all particularly fascinated by the speech of the hon. Member for Oldham, West (Mr. Meacher). As my hon. Friend the Member for Beverley (Mr. Cran) pointed out, some of the promises made in that speech may prove somewhat rash. I noted the get-out clause that it contained —that those promises would not have to be implemented in the event of an economic crisis—and I suspect that if Opposition Members were ever returned to office that clause would be implemented fairly early on.

Ms. Short: In Labour's policy review—I suggest that the hon. Gentleman goes away and reads it—we promised that we would re-establish SERPS, making it as good as it was before and adding the possibility of top-ups. We shall then require any opting-out pension scheme to match SERPS: one of the reasons for the improvement in occupational pension schemes is that they have had to match SERPS. That is the framework of our commitment, and the way in which it will be implemented.

Mr. Hague: I am grateful to the hon. Lady, and I am sure that I shall read the policy review many times during the next few weeks, although I think that Labour may have to look again at what its proposals mean for pension fund surpluses.
I listened with care and respect to the speech of the right hon. Member for Stoke-on-Trent, South (Mr. Ashley), but I hope that we shall not fall into the trap of comparing increases in benefits with reductions in tax rates over an extended period, as if there were a simple choice between the two. One of the reasons for the current record tax revenues is the reduction in tax rates, including those paid by top earners, who are also supplying record tax revenues. I am sure that the right hon. Gentleman will understand that, rather than a choice being presented between the one and the other, one is required to supply the other.
The Government have a solid record of improving and expanding social security provision and targeting it more effectively—

Mr. Ashley: I am sorry to interrupt the hon. Gentleman, but is he disputing my figures?

Mr. Hague: I was not disputing any figures supplied by the right hon. Gentleman. I was disputing the case for


comparing tax reductions with increases in benefit as though there were a choice between the two. Nevertheless, I am sure that hon. Members on both sides of the House will want to check the figures given by all hon. Members in the debate, as is customary.
The Government have received far too little political credit for their achievements in social security provision, and the debate provides Conservative Members with an opportunity to put that right. The improved benefits for widows, the sick and disabled and the terminally ill for which the Bill provides represent the latest example of the Government's effective and prudent spending of increased resources. Over the past 10 years total expenditure on cash benefits for the sick and disabled has increased by more than 100 per cent., even after allowing for inflation.
Although there is and always will be scope for more provision for the needy, the average annual real increase in spending has been dramatically higher in the 1980s than it was in the 1970s: it now accounts for more than 15 per cent. of total social security spending. That is good news, in keeping with what the nation has most wanted the welfare state to provide—help for those who are unable to help themselves. Opposition Members who complain, even now, about the level of benefits were utterly unable to do better when they were in office; indeed, they could not even contemplate being able to give so much assistance to the least fortunate members of society.

Mr. Ian McCartney: Will the hon. Gentleman give way?

Mr. Hague: I will not give way for the moment, as I have already done so twice. I may do so again later.
Of course we recognise that there are always cases for increases in benefits, but we might be forgiven for thinking that, while requesting so many increases in specific benefits, the Opposition could have had the good grace at least to congratulate the Government on their overall record.
The package announced by the Secretary of State last October is an important part of the background to the Bill. At that time much righteous indignation was being devoted to the subject of child benefit and the Government's refusal to increase it. Such an increase, however, would have constituted an indiscriminate use of the nation's resources, with much of the additional provision going to people who were already better off than many of the taxpayers called on to pay for it. I congratulate the Government on having had the courage to resist the hysteria and to use the money where it might win fewer headlines, but would be of more genuine use.
Half a million disabled people and their carers will benefit from the improvements announced last October. The premiums for disabled children provided through income support have been more than doubled; the help provided by attendance and mobility allowance has been extended to new specific groups; and the benefit structure for those on employment rehabilitation courses has been improved so that they can, for instance, continue to receive invalidity benefit. More support has been given to those who care for disabled people, and the new carers' premium in income support and housing benefit for those receiving care allowance is particularly welcome. I am sure that the Government have not yet reached the limit of the improvements that they can make, but a warm welcome should be given to what they have done so far.
May I make a specific point about the earnings limit on care allowance? I have already written to the Department about this. Many carers manage to work on a part-time or occasional basis, but are often able to do so only in a rather irregular way. Sometimes they can work for only a few weeks of the year, when other members of the family take over the task of looking after their dependants. As a result, the carers may lose care allowance for some weeks of the year, while their total annual earnings are still substantially less than the weekly earnings limit multiplied by 52. Would it not be better to calculate entitlement on the basis of annual earnings, or provide the option to do so? I hope that Ministers will consider that possibility in the coming year.
The Government, then, can point to a strong record on social spending, which I believe should be drawn to the country's attention. The Bill will bolster that record. Let me mention three aspects in particular.
First, the Bill makes further improvements in the assistance provided for sick and disabled people. I know that some of the key features of the package of improvements announced earlier this month are not included—for instance, the new disability allowance, and disability employment credit—but we can look forward to their implementation in the future. Other measures for the sick and disabled are included and are very welcome, particularly the removal of the six-month qualifying period for receipt of attendance allowance by the terminally ill, which has long been a source of discontent. Equally encouraging is the Government's declared aim of dealing with applications in a matter of two weeks. Let us hope that they can deliver on that.
The age-related addition to the severe disablement allowance is also very welcome. It will help many families, including some in my constituency, who are unable to work as much as they might because of the need to take care of young disabled people. The improvement in widows' benefits is also welcome. It is possible that only a small number of widows will be affected by clause 5, which will help those who make a late claim owing to a delay in determining the death of their husbands; even so, the action was worth taking, and the clause is a good piece of tidying up.
The part of the Bill that deals with occupational and personal pension schemes will be good news for millions of people. More than 70 per cent. of newly retired pensioners now have an occupational pension. The new ombudsman service will be of great practical value, and will provide a reassuring presence for many pensioners. I am pleased to note that the ombudsman will have statutory powers of enforcement.
The tracing service established by clause 8 is another important measure: it enables the Government to keep up with the times, and to remove any remaining disincentives and obstacles to the taking out of occupational pensions. Confidence that pensions with previous employers can be tracked down is essential in a world where occupational pensions are more common and the mobility of labour is increasing.
The strengthening of protection for members of pension schemes is another improvement. It is right to strengthen the protection for early leavers of occupational pension schemes, and to give more help to married women and widows by granting the right to a guaranteed minimum pension to those who have contracted out of SERPS. I am sure that the new restrictions on


self-investment are right, and I am pleased that Ministers have reversed their initial position on restrictions on small self-administered pension schemes. Members of such schemes generally have sufficient control over their funds not to need such protection.
In general, I consider the Bill to be a very positive measure, and part of a continuing positive record. Most of those who complain about its provisions could never have imagined a few years ago that the nation would be devoting such a level of resources to social security, let alone providing such an increase in funding for the sick and disabled. In the face of all the cynicism, the Government continue to spend more, to spend it in the right places, and to do so without bankrupting the nation. That is the proper way in which to improve and expand the welfare state.

Mr. John Battle: Despite the attempts of Government to find positive reforms in this Bill and to sell it in the context of the Government's economic approach, I hope that the House will agree that the Bill is a disappointment and a wasted opportunity—not only because it fails to address significantly some key issues, such as the basic retirement pension on which people in the constituencies of some of us have to live, but because it fails to recognise that child benefit has been frozen and does not put before the House the comprehensive benefit for disabled people for which some of us have been pressing for a very long time. In fact, the Bill will implement few of the proposals that were announced in the Secretary of State's recently published report "The Way Ahead: Benefits for Disabled People". It even sidelines that long-awaited report.
In his introduction to the report the Secretary of State wrote:
When completed, this programme will build on the many improvements already made in recent years to give us a more comprehensive and coherent system of disability benefits than ever before.
That statement seems to hinge on a future.promise—one based on the fact that many claimants are experiencing a dismantling of social security and a reduction in their incomes. There are 6·5 million disabled people in Britain, but it is estimated that, in practice, the Bill will affect only 850,000 people, including carers. We are entitled to ask whether this is the Government's best response to the surveys that they have commissioned over the years, the results of which they have now gathered together.
What about pensioners, who make up the majority of disabled people? There are 4·2 million disabled pensioners in Britain, yet the Bill contains no measures to improve their financial position. Conservative Members boast about the improvement in incomes and living standards achieved by the Government. Recently I received from a 74-year-old widow a letter setting out in clear detail a table of her income every year since November 1987, taking account of the changes in the system and of reductions in housing benefit. Her income, at £48·35 a week, is exactly the same now as it was in November 1987. She writes:
Every time something is reviewed or reformed by this Government we either finish up with less money or worse services … I am now having to find an extra £5·25 to pay for

the cut in housing benefit, 20 per cent. of my rates and all my water rates each week. This is on top of all the other increases in gas, electricity, telephone and food.
That letter is from a lady who gave up her job 10 years before her retirement date to look after her sick husband so that he would not have to be in and out of hospital. Is it fair that this Bill will do nothing to improve her position?
Of course, it could be argued that it would be churlish not to say that clause 1, which extends attendance allowance to the terminally ill without a waiting period of six months, is an improvement, but the benefit should be paid as soon as need is established.
Clause 2 proposes an addition to the severe disability allowance related to the age at which the claimant became disabled. But of the 263,000 people in receipt of severe disability allowance, 140,000 get income support, too, and others receive means-tested housing benefit. They will see no difference as a result of this clause. The discriminatory 80 per cent. disability test will ,remain. Perhaps the Secretary of State, who claims that there have been increases, will tell the House why the Government will not increase the severe disability allowance to the same level as the state retirement pension. That would be a start.
Furthermore, the abolition of the earnings-related allowance, which is proposed in clause 3, will decimate an already reduced benefit. The Government claim that this benefit will overlap with invalidity benefit. The point is that invalidity benefit represents income maintenance, whereas the reduced earnings allowance is compulsory. In practice this is another reduction in benefit.

Mr. McCartney: It is vital that we explain to people what is happening in respect of reduced earnings allowance, which is paid to people who are maimed or injured during their work. Many of those people will never return to the type of work in which they were engaged, or to the workplace at all. The Government have steadily reduced the ability of working people to claim this benefit. We have reached the stage where a worker who has had two fingers amputated can fail to qualify for that benefit. That is the sort of thing that the present Government have been doing to people injured in the workplace.

Mr. Battle: I am grateful to my hon. Friend, who has spelt out in detail the implications of the cuts for people whom we have been trying to represent for months, if not years.
Clause 4 will remove entitlement to the earnings-related element of invalidity benefit after the 1990–91 tax year. Even that measure flies in the face of the proposals set out in "The Way Ahead".
The Bill offers a bit of piecemeal tinkering, with no signs of a comprehensive scheme. Worse, it manifestly ignores the main findings in "The Way Ahead", which spelt out in detail the huge gaps in income between disabled people and non-disabled people. Where in this Bill, we are entitled to ask, are the proposals to cover extra costs, such as those involved in diet, heating and laundry, that many disabled people incur as a consequence of their disability? We are no further forward than we were when the special additions were withdrawn as a result of the so-called Fowler review.
The Bill proposes abolition of the invalid pension allowance by April 1991 to encourage occupational pension schemes. In his statement on 10 January the Secretary of State said:


the forthcoming Social Security Bill will contain measures to enhance the benefits of severely disabled who were never able to work, or who were disabled early in life, while at the same time ensuring a better balanced and more sustainable overall structure of income replacement benefits for incapacity, taking account of the encouraging growth of occupational provision in this field."—[Official Report, 10 January 1990; Vol. 164, c. 942.]
What lies behind those words about a more sustainable overall structure is a clear attempt to reduce social security costs again—and that amounts to a reduction in benefits. Occupational pension schemes are least likely to exist for those most at risk, and this proposal will only undermine the security that SERPS provided. The result will be a saving of £350 million for the Department of Social Security by 1991 and, in practice, a further erosion of disability benefits.
We welcome the introduction of a pensions ombudsman, but can the Secretary of State assure us that that person will have power to look into the current duping of the taxpayer in the pensions section of the Department of Social Security?
Today's Financial Times informs us:
After running a healthy surplus for years, the National Insurance fund has plunged into deficit. I would be the last to object if this reflected a more generous policy on benefits. Needless to say, it does not. The basic pension, which continues to decline against earnings, is a meagre £43·60 a week—rather less than the cost of a meal for two in a typical City restaurant.
The reason for that is that when people contract out of SERPS, not only does the fund lose contribution income, as the Secretary of State acknowledged earlier, but the Government are paying a 2 per cent. subsidy to people who switch to personal pension schemes. It is a bribe to undermine the SERPS scheme and to promote private pensions. Although, officially, the Government budgeted for 0·75 million people to leave SERPS, the latest estimate—it was echoed in the remarks of the Secretary of State earlier today—is that about 4 million people will have left the SERPS scheme by April this year.
As the Secretary of State confirmed, by next April the fund overall will have lost nearly £5 billion in three years. Interestingly, the Financial Times concluded its article with the following:
It is surely the height of fiscal irresponsibility to undermine the National Insurance fund by spending £1·5 billion of taxpayers' money encouraging people to gamble their pensions. When so many of today's pensioners are obliged to live on so little, the policy looks more than a trifle callous.
Contrary to what the Secretary of State suggested, it is not a sum to be brushed aside lightly, yet the Government have embarked on a totally inefficient waste of significant financial resources that could be used to improve other social security benefits.
In 1979, the Conservative manifesto claimed that there would be a move towards a coherent system of disability benefits
as swiftly as the strength of the economy allows.
The problem with that trickle-down approach is that it always begs the question whether the economy is strong enough to bring the poor, the elderly and the disabled in our society in from the margins. Worse, since 1984 the Government have regularly proclaimed that increasing economic prosperity has arrived, yet, in the words of the Minister for Social Security at the front of the report "The Way Ahead",

as a society, we have a long way to go before we accept disabled people as full members of our economic and social community.
We certainly agree with that. Sadly, there is a long way to go and the Bill does not take us much further forward in ensuring that disabled and elderly people have adequate incomes to meet their needs, and incomes that ensure that they have a decent quality of life and retain their independence. This is a piecemeal, cost-cutting Bill. I urge the House to ask the Secretary of State to take the Bill back and to think again because it is just another missed opportunity.

Mr. Tim Smith: I suspect that the sentence that the hon. Member for Leeds, West (Mr. Battle) has just quoted from the document "The Way Ahead" had more to do with attitudes towards disabled people in society than with the cash that is provided to them to help them to overcome their disabilities. If that is the case, I agree with it. Although attitudes are improving, there is a long way to go until we get to the point where people treat disabled people as if they were not special cases but ordinary people with a disability that could be overcome with the help and co-operation of others. That help and co-operation is not just a question of financial help and co-operation—

Ms. Short: That is important.

Mr. Smith: Yes, it is important, but it is also important that through a process of education we try to improve people's attitudes to disabled people and persuade them that many disabled people could play a full role in society. There are apparently 6·5 million disabled people in our society, but I believe that many of those people have already overcome their disabilities and play a full role. Therefore, I believe that that is a misleading figure from which to start.
I support the Bill because it makes worthwhile improvements to both the system of social security and our occupational pension schemes. I very much support the Government's philosophy on social security, which is, as far as is possible, to devote what are necessarily finite resources to those people who are most in need. So, if it comes to a choice—

Ms. Short: What about tax cuts?

Mr. Smith: If the hon. Lady will allow me, I shall deal in a moment with her point about tax cuts.
The important point about social security is that it should be devoted to those who are most in need. Clearly child benefit does not achieve that objective. So, if it is a choice, which I think it must be, between an increase in child benefit and targeting improvements on specific groups, I think that the Government are right to choose the latter.
The hon. Member for Birmingham, Ladywood (Ms. Short) earlier described the sum of £16 million as "peanuts". That epitomises the Opposition's attitude. First, £16 million is a substantial sum of money in its own right in absolute terms; and, secondly, if it is targeted on a specific group of people who are in need, it can result in substantial improvements in the weekly benefits of the individuals concerned. When my right hon. Friend made his statement in, I believe, October, he gave examples of


some substantial improvements in the weekly benefits payable to individuals in need. I hope that the hon. Lady has taken that important point fully on board.

Ms. Short: Clearly £16 million for one, two or a few people is an enormous sum of money, but £16 million shared among all who are severely disabled is peanuts.

Mr. Smith: The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) described £300 million as minuscule. I do not see such sums in that way. We must recognise that they are large sums in absolute terms.
The hon. Member for Ladywood made a revealing intervention earlier when she said that we can assume that we shall have 2·5 per cent. economic growth for the foreseeable future and so we can plan to spend the money now. I advise her that, although we did not have such growth under the last Labour Government, we have certainly had it in the past decade so we have no right to make that assumption. We must have sensible and prudent economic policies because only then will we achieve economic growth.

Ms. Short: The level of economic growth in our country since the second world war has been 2·5 per cent. or more continuously. In fact, there was continuous growth throughout the lifetime of the last Labour Government. We then saw a dip in the early years of the Tory Government and then a continuation to exactly the same slope. Therefore, we can project that the future is likely to be like the past. Obviously if there is a collapse and a crisis, that transforms everything, but we can expect 2·5 per cent. plus economic growth every year into the foreseeable future—[Interruption.] Of course, we can.

Mr. Smith: That illustrates the fallacious assumption upon which much of Labour party policy is based. Indeed, the last Labour Government's approch to spending was, "Spend now, and worry about where the money is going to come from later." It was that approach that led to the arrival in this country of the International Monetary Fund in November 1976.
Page 37 of the report of the Occupational Pensions Board that was published in February 1989 contains two revealing tables. They illustrate the absurdity of the statement of the hon. Member for Oldham, West (Mr. Meacher). Indeed, it has been the most remarkable feature of the debate because the hon. Gentleman made a revealing statement about Labour party policy. I suppose that he has been told that in future he should not make any further commitments that would increase public spending, so he has decided to direct himself to private pension schemes and to imposing a huge additional cost on them.
The two tables show the key factors that affect the performance of pension funds. The first column of each relates to average earnings growth each year and the other column to dividend flows each year. One table covers the period 1975–81 and the other covers 1982–87. Although the pattern is irregular, the net result is that in the period of the Labour Government the increase in average earnings was well in excess of the increase in dividend flows. That is why the OPB stated in 1981:
The picture was discouraging as far as pension scheme finance was concerned, and it is easy to understand why the Board did not suggest a course which would place once-for-all past service burdens on schemes.

The next paragraph is headed "Finance now" and states:
The growth in dividend flows has greatly outstripped the growth in average earnings. We think it unlikely that many schemes are hard-pressed as far as their general finances are concerned, and we therefore consider that they should be able to shoulder the modest costs involved in our proposal.
Those two tables show the transformation in the finances of pension schemes over the past decade. In the 1970s, I was a trustee of a private occupational pension scheme. It was a constant struggle to keep it solvent. When there was a deficit, one could not ask—one would not expect to ask—the employees to make up the difference, so when there was a deficit the employer had to increase his contributions. It follows that, when there is a surplus, it is not unreasonable for the employer to say that he will reduce his contributions.
I am sure that you, Mr. Speaker, are aware that we had a debate in the House only last week on our pension scheme when it was agreed that the contributions of the employer, which in this case is the Treasury or the taxpayer, should be reduced from 18 per cent. to 4·4 per cent., while our own contributions were to remain at 9 per cent. That is right when there is a pension scheme surplus. However, the hon. Member for Oldham, West (Mr. Meacher) assumes that that position will continue come hell or high water. He is hoping that hell will come soon because he is hoping for another Labour Government. If that happens, there will be an immediate collapse in investor confidence and the escape clause that he described will be called into play. He has announced a policy which amounts to fraud and which, if it were persisted with for long, would cripple most private sector pension schemes. Everybody should understand the implications of that policy.
I welcome the proposal for a pensions ombudsman. That is a better idea than the tribunal suggested by the Occupational Pensions Board. Like the other ombudsmen posts in the financial services industry, it should be financed by the industry rather than the taxpayer. My right hon. Friend said something along those lines. There are quite a number of ombudsmen in the financial services sector, and I wonder whether the new post could be combined with one of those. There is a proliferation of them. I agree with my hon. Friend the Member for Ealing, Acton (Sir G. Young) that the ombudsman should publish reports. That would be helpful.
The Bill proposes a pensions scheme register. That will be helpful because of the proliferation of schemes and because many people change their jobs many times. They may have difficulty discovering who is responsible for paying their pension. I hope that it will not be necessary to place the cost burden on the taxpayer. Perhaps the register could be operated by Companies house, which has great experience of registering companies. Many of the companies that register with Companies house also run pension schemes. It might be possible to operate along those lines, but the cost should be paid by the pension schemes, perhaps through an annual registration fee.
We have already discussed at some length the question of early leavers. I am glad that, because of the improvement in the financial position, it is now possible for the Government to accept something that was not acceptable only five years ago in 1985, which is substantially to improve the lot of the early leaver. There must be a sensible balance. Employers set up occupational


pension schemes to encourage employees to stay, not to leave. It is part of the remuneration package and employers hope that their employees will remain with them. However, it is important for the national interest that people do not feel that their pension scheme is such that they cannot afford to leave. Job mobility is important and early leavers should have a decent deal. The proposal strikes a sensible balance and should be welcomed.
I welcome the changes in self-investment that my right hon. Friend announced just before Christmas. The changes originally proposed went too far. It is sensible to omit from the proposal those who are self-employed directors because clearly they are in a different category. I understand the more general reservations about large amounts of pension fund money being invested in the company because employees then have too many eggs in one basket. The proposal is just right. I welcome that part of the Bill that deals with occupational pensions and also the proposals on social security.

Mr. Eric Illsley: Like other hon. Members, I shall be brief.
Clause 1 deals with the six-month rule for attendance allowance but, unfortunately, it does not go far enough. I shall give one or two examples of the problems that I have encountered with the implementation of that rule.
Under the six-month rule the applicant who is diagnosed as being entitled to receive attendance allowance has to wait for six months, which gives rise to a number of problems. In particular, if the illness is serious the applicant and his family may need assistance quickly. That relative—perhaps a husband or wife—might have to give up work to care for the applicant, which means an immediate loss of income to that family. The illness could involve certain expenses such as travel to hospital and special diets. When the applicant is elderly, there could be the expense of paying for extra nursing and other help.
The saddest problem with the rule is where the applicant dies after being diagnosed as qualifying for the allowance, but before the end of the six month period when the benefit would be put into payment. Since 1987, I have dealt with three such tragic cases. It is extremely distressing to experience the tragic death, after serious illness, of a relative at a time when an application for attendance allowance has been granted, but before the end of the six-month period the applicant dies and a letter arrives from the Department of Social Security saying that the benefit is not payable.
I know of a tragic case of an elderly couple where the husband had to employ MacMillan nurses to look after his wife. She was not diagnosed as terminally ill, but she died before the end of the six-month period. He had been put to particular expense only to find that he did not qualify for receipt of the benefit because his wife had died. The only value of the six-month rule is to determine the seriousness of the condition of the person making the application, and to determine whether the illness is serious enough to warrant payment. A six-month period can be classed as too long to determine whether a person is sufficiently seriously ill to qualify for the benefit. Many applicants regard the rule as a Government device to save money on the attendance allowance. Failing the abolition of the six-month rule—which would perhaps be the best way to deal with the matter—any amendment to it should

ensure that it takes into account genuinely seriously ill applicants rather than simply using the definition of terminally ill, which is too narrow a definition in this context.
There are problems in diagnosis. A person might be seriously ill, but not diagnosed as terminally ill. A diagnosis might be made at the time of the application and the terminality of the illness might occur later. It puts a responsibility on doctors, delegated medical practitioners and the attendance allowance board to determine what is or what is not terminal illness. I suggest that the criterion should be genuine serious illness rather than terminally ill.
In support of that, I refer the Secretary of State to a letter that I received in June 1988 from the attendance allowance unit of his Department in Norcross in Blackpool, which referred to a claim with which I was dealing. It states:
Any system of short-term social security support—over and above the present State sickness benefit and statutory sick pay schemes—for people who might die before completing the six month qualifying period for attendance allowance would involve their classification as terminally ill. Quite apart from the practical difficulties, in some cases doctors can, for good reasons, withhold or delay telling patients and their relatives about the diagnosis of terminal illness. Again, given the many advances in medical science and knowing the spirit of some patients, doctors may be reluctant to commit themselves to such a firm prognosis.
The Secretary of State's Department is casting some doubt on the usefulness of the definition of terminally ill for the six-month qualifying period for attendance allowance. Although it is welcome as a step forward in alleviating the problems with the six-month rule, rather than using the definition of terminally ill, a definition of a genuine serious illness, whereby the attendance allowance board can determine that the illness is likely to extend beyond the six-month period, should be included in the Bill.
Clause 3 abolishes the reduced earnings allowance, which was formerly the special hardship allowance. It is interesting that the Department removed the emotive word "hardship" from the definition of the benefit and now it has decided to remove the benefit. That will have a major effect on certain industrial sectors, for example, the mining industry. For eight years I dealt with compensation claims for the industry—social security benefits and common law damages claims. Many serious injuries would automatically mean deployment of an injured miner to light work, with the inevitable consequence that he would be deployed to light wages as well. Reduced earnings allowance was a necessary benefit to enable an injured miner to maintain his income level during the period of his disability and on recovery.
As the Secretary of State is probably aware, serious injuries that would qualify a miner for reduced earnings allowance and disability benefit extend over a long period. I have dealt with cases that extended over a number of years. If a case is contested, the period can be as long as 12 years. The mining industry has a long history of severe injuries and a large compensation sector. The British Coal Corporation and the union employ staff to deal with compensation claims. Although some 90 per cent. of cases have been settled amicably through negotiation, a proportion have had to be dealt with through tribunals and the courts.
The negligence issue raises the question whether common law compensation would do away with the need for reduced earnings allowance, and I suggest that it would


not. There is always a litigation risk in a negligence claim and such claims are not aways successful. A compromise settlement might mean that the compensation awarded to an applicant is reduced by up to 50 per cent., even though he still needs the same treatment. It might not adequately cover future loss of earnings.
British Coal has a no-fault liability scheme, incorporating a loss of earnings allowance for miners who are diagnosed as suffering from pneumoconiosis. Unfortunately, the loss of earnings allowance under that scheme is restrictive, and it is not used often. Pneumoconiosis is a progressive disease. There are problems with diagnosis; often the disease is not diagnosed until late in a workman's working life. To qualify for loss of earnings allowance under the pneumoconiosis compensation schemes, the workman has to work in a dust-free environment, which usually means on a colliery or unit surface, which again means light work and light wages.
A few weeks ago, the case was raised with me of a common law wife who, obviously, did not qualify for widow's benefits or widow's allowances. I ask the Secretary of State to consider the position of that young lady. She visited me, having lost her partner with whom she had been living for the previous 15 years. To all intents and purposes, the lady was in the same position as a married woman in all but the marriage certificate. The occupational pension was awarded to her as a partner. She did not qualify for widow's benefits. It seems hypocritical that, when she went to live with her partner and immediately declared that fact to the social security office, the couple was classed by the Department as, to all intents and purposes, a married couple, yet, when it comes to paying out money on the death of a long-term common law partner, there is no entitlement to benefit.
I welcome the clause on energy efficiency, on which, I presume, my hon. Friend the Member for Cardiff, West (Mr. Morgan) will touch. As a member of the Select Committee on Energy, I welcome this measure. It is good to see that at least one Department recognises the value of energy efficiency, especially as this follows the Energy Committee's report on the greenhouse effect.

Mr. James Cran: I support the Social Security Bill—[HON. MEMBERS: "No."] Yes, of course. No doubt the Opposition will do the opposite. I intend to confine my remarks to that part of the Bill about which I know rather more, on the principle that I have listened to others speak about state benefits who clearly know more than I do. Such expertise as I have on this subject emanates from the fact that, before becoming a Member, I was—as an Opposition Member remarked during one of my interventions—the man from the CBI. It is equally true to say that, before that, I was the man from the National Association of Pension Funds. From that experience, I gathered some facts, none of which, regrettably, was reflected in the remarks of the hon. Member for Oldham, West (Mr. Meacher). The hon. Gentleman made a number of extravagant, insupportable statements. I assure the House that many Conservative Members will read his remarks carefully when they are printed tomorrow, because they were startling.
The hon. Member for Oldham, West misunderstands the principle of an occupational pension scheme or, for that matter, a portable pension. That was illustrated by his dissertation—"dissertation" is far too kind a word—on inflation proofing. He made promises without cost implications, saying that it could all be paid for out of surpluses. Anyone who knows anything about this subject realises that that is not how it is done. A pension fund must meet long-term obligations, which means financial discipline—about which I heard nothing from Labour Members.
I suspect that the occupational pension fund movement is not worried about the Government, who have produced single-figure inflation. I associate myself with the statement of my right hon. Friend the Secretary of State that inflation is too high at the moment. The occupational pension fund movement is worried about the return of a Labour Government—I know that we will not have a Labour Government, but let us postulate for a moment—and inflation of 27·5 per cent. I assure the House that the corollary of that would be bankruptcy for the occupational pension fund movement. If I am wrong, and if I am lucky enough to be on the Standing Committee, I shall be interested to hear what actuarial advice the hon. Member for Oldham, West received to lead him to make his statement. I will want to learn which bodies he has consulted and what detailed advice he has been given, because my view is that his remarks are insupportable.
Labour Members may not wish to accept this point, but an occupational pension or a portable pension is a prized possession, as is easily seen by statistics. By 1986, about 70 per cent. of newly retired people had such a pension. Between 1979 and 1986, the incomes of occupational pensioners rose in real terms by 56 per cent.—a staggering performance by any standard in terms not just of the investment managers but of increased returns to pensioners, as was pointed out by my hon. Friend the Member for Beaconsfield (Mr. Smith). That is a real benefit. I concede that the maximum benefits in occupational schemes accrue to those who stay in them. Not all workers stay in their occupational pension schemes. They move round. That is why the reform introduced by my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) was an epoch-making measure. The whole system was freed up in a way that many people in occupational pension schemes appreciated.
My conviction and the conviction of my right hon. Friend is that, if possible, we must induce people through occupational schemes, portable schemes and other devices to make provision while they work for the time when they will not work.

Ms. Short: I presume that the hon. Gentleman has read the report of the Occupational Pensions Board which laid the basis for the reforms in the Bill. Many individual pensioners who have lost out and who are increasingly impoverished gave evidence. I accept the hon. Gentleman's average performance figures. Does he agree that we must protect everyone from being conned into disastrous pension schemes that will impoverish them in old age? We need a system of regulation so that that will not happen.

Mr. Cran: When the hon. Lady bandies about words such as "disastrous schemes", she must come forward with evidence.

Ms. Short: It is in this report.

Mr. Cran: I mean evidence from individual schemes. I was a member of a fairly good scheme for several years, but a few years later I moved to another scheme. Difficulties occurred about the transfer payment and all the rest. That is where the problem occurs in the occupational pension fund movement. It is perfectly clear that the hon. Lady does not understand the basis of the occupational pension fund movement. I look forward to hearing her evidence in Committee, and we shall consider that evidence when it is presented to us.

Ms. Short: The hon. Gentleman has not read the report. If he had, he would have seen the evidence laid out in a table. Several individuals wrote in to say that their pensions had been eroded in value over time and that they were angry about it. They believe that Government regulation is needed. The report also makes it clear that money purchase schemes depend on cashing in the moment that someone retires. If that coincides with a drop in the stock market, the members lose out. The hon. Gentleman must be aware of those examples, and I could give more. The question is whether the Government should regulate to protect people from falling into schemes that provide glossy brochures suggesting that they will be fine in old age only to find that they are impoverished. Regulation is needed to protect everyone to a minimum standard.

Mr. Cran: To clear up one anomaly, I have read the report. The problem with reports is the construction that one puts on them. I fear that the Opposition have put the worst possible construction on that report. One must go beyond the report and consider individual schemes. When the hon. Lady makes such allegations, we must see the detailed evidence for them.
If I am lucky enough to be chosen to serve on the Committee, I shall return to the problem of inflation-proofing. The problem will not be solved by a dictum of the Secretary of State that inflation is 11 per cent. so members of all schemes must be indemnified for it. We live with occupational schemes which are funded, and obligations can be paid only from the earnings that the scheme makes. That is why I believe that, rightly or wrongly, Opposition Members profoundly misunderstand what occupational pensions are all about.
It does not elevate the argument to bandy about extravagant words. Of all the schemes that I have known in my lifetime—I am no longer associated with the occupational pension fund movement—some have been good and some bad, but none has been disreputable—or whatever word the hon. Lady used.
I am in favour of occupational and portable pensions because we should make provision while we work for the time when we do not work. The great advantage of such schemes is that they take the burden off the state—the taxpayer—and release moneys for the social security budget, which is currently about £56 billion. Resources are freed for the people who need them rather than being spent on those who do not. That is absolutely correct, and my right hon. Friend the Secretary of State has my support in that.

My right hon. Friend the Secretary of State is absolutely right to introduce a pensions ombudsman. Such a provision is long overdue. I remember such an initiative being discussed in my days in the National Association of Pension Funds. It is a pity that that great industry did not have the courage to set up an ombudsman to consider matters on which individual pensioners disagree with those who run the schemes. I am therefore delighted that we shall legislate to provide an ombudsman.
The great problem, however, is deciding what constitutes a dispute between a scheme and an individual. My experience tells me that all members are in dispute at some time with their schemes. I have had such a dispute. The last time that I wanted to transfer a pension I thought that the transfer payment was too low. Is that a dispute? It might be. I remind the House that in this business, dissatisfaction emanates from unfulfilled expectations, which are endless in the pension fund movement and, from what I have heard, on the Opposition Benches.
My right hon. Friend the Secretary of State is right to set up a tracing service. Again, it is long overdue. From my time with the NAPF, I remember people sitting round board room tables saying that it would be a good idea, but they did not have the courage, foresight or ability to go ahead and set it up. Indubitably, they should have done. I am heartened to hear that my right hon. Friend intends to set up the service with the co-operation of the industry, and I expect that that co-operation will be forthcoming. He may rely on some of us to put our weight behind some bodies in the movement to help him.
I understand what the Government are trying to do about asset deficiency in winding up schemes and the consequential obligation to revalue benefits. That is correct, even though the Opposition would like to do more. All Oppositions want to do more and to spend more of everyone's money. That is entirely understandable. My right hon. Friend is advancing the conditions of pensioners a little further. His gradualist approach is correct. But I do not understand why the Government have decided to adopt the view that when a scheme is wound up a debt should be imposed on the employer. The OPB suggested that improved preserved rights should be a first charge on the surplus of a wind-up. That is a more appealing solution than the one that my right hon. Friend the Secretary of State has chosen. I hope that he will be prepared to listen to some of us, as we are prepared to listen to the justification for his proposal.
On the ceiling on self-investment, one is tempted to ask why, in heaven's name, it has not been done before. I do not say that about large self-administered schemes. I used to hear stories of some large and medium-sized self-administered schemes that were unhealthily self-invested. Clearly, for all the reasons that my right hon. Friend gave, it is wrong that pensioners should rely unduly on the fortunes of one company. He is correct to incorporate a provision to deal with that. With his usual perspicacity, he recognises that there is a problem with small businesses. There is no doubt of that. We cannot proceed at the speed at which some would like, so I welcome the concession that he has made.
However, perhaps on another occasion in the House or in Committee my right hon. Friend will explain the problem of small self-administered schemes where the benefits are for people who may not be 20 per cent. directors but less than that and who do not operate the


scheme for anybody but themselves. I should be grateful if my right hon. Friend could address that deceptively important point.
In conclusion, the past four years has seen a stream of legislation and regulations on the occupational pension fund movement and portable pensions. I support most of it. It was forced on the Government, although many of the problems could have been solved by the movement years ago if it had tackled the problems of early leavers. It did not and the Government stepped in. But a balance must be struck in these matters. I suspect that many employers are beginning to say to themselves that occupational pensions are becoming administratively complex and therefore costly. My right hon. Friend will be well aware that the time may come when many employers will ask themselves whether the establishment of occupational pension schemes solves more problems than it creates. I put that thought into my right hon. Friend's mind for him to consider.
Apart from the few small caveats that I have mentioned, these pension provisions are absolutely right, and my right hon. Friend has my support.

Mr. John McFall: I associate myself with the comments of my hon. Friends, particularly those of my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). The £300 million for the disabled is a drop in the ocean when considered against total social security expenditure of over £50 billion.
It is said that one can judge a society by how it treats old people. If we look at how the Government have treated our old people in the past 10 years, our judgment is, indeed, harsh. The social security changes resulted in £4·5 billion being lopped off the budget, while Ministers gave us platitudes about how they cared for people in a non-existent society.
My right hon. Friend said that he had spoken to disabled groups. Last week I spoke to senior citizens in my constituency and they gave me the same message for the Secretary of State. This is an inconsequential Bill. It is turning the ratchet and making people poorer by the day, the month, the year. If that were done through neglect, it would be shameful enough, but it is being done by design. The source of that is the Social Security Act 1986. What did the Government do? They broke the link between pensions and average earnings. It has been said before, but needs repeating, that if that link, which the Labour Government introduced, had been maintained, the single pension would be £12 a week more and the married pension £18 a week more.
The Institute of Fiscal Studies investigated pensions. If pensions and benefits had been linked only to prices from 1948 onwards, the single pension today would be, not £41·40, but only £17·37—only 42 per cent. of what it is now. If we project that 20 or 30 years forward, we can see how much money the Government will save in the long term and their disregard for keeping pensioners' benefits at a decent level.
It is no use just linking pensions to prices or to inflation. That is inadequate. For low income groups the inflation rate is greater than that of the retail prices index. Another study was carried out into the poorest and richest 10 per

cent. of the population. Between 1974 and 1982 the retail prices index for poor people was 17 per cent. greater than it was for rich people simply because people on lower income must spend a higher proportion of their incomes on basics, such as food, housing and fuel. Age Concern compared the amount of fuel needed to heat a home in Glasgow and Aberdeen with that for a home in Bristol and found that it took 20 per cent. more in Glasgow and 30 per cent. more in Aberdeen than in Bristol. Yet the Government ignore that evidence.
In the past few years insult has been added to injury. In May 1988 the Prime Minister emphasised that "everyone" had benefited from increased prosperity. The right hon. Member for Blaby (Mr. Lawson) said that only a "tiny minority" of pensioners were disadvantaged. Those right hon. Members escaped relatively unscathed from their callous, indifferent comments. Not so the right hon. Member for Croydon, Central (Mr. Moore) who, when he was Secretary of State, tried to get the Government off the hook, but came unstuck when he said that poverty no longer existed. For him, poverty must mean death through malnutrition, if he was serious in claiming that there was no poverty.
Those unfortunate comments must be seen against the comments of Tory guru, Adam Smith, who stated that necessities were
not only the commodities which are indispensably necessary for support of life, but also whatever the custom of the country renders it decent for creditable people, even of the lowest order, not to be without.
Adam Smith talks about the lowest order, but the Government do not even mention it because they treat everyone as being of the lowest order. If the Government cannot be persuaded by that high Tory pantheon, Adam Smith, they will surely be persuaded by what the right hon. Member for Wallasey (Mrs. Chalker), now the Minister for Overseas Development, said in 1979:
it is not sufficient to assess poverty by absolute standards; nowadays it must be judged on relative criteria by comparison with the standard of living of other groups in the community.
If the Secretary of State should learn anything from the debate, it is that he should look into the issue of poverty. He and the Cabinet have studiously avoided it. Let him define what poverty is and what a man or woman needs to get by in life. Then he can start to convince people that the Government are concerned about people's needs and how they live.
Elderly folk, including disabled people, come to my surgery and tell me time and again that they cannot live on the state pension. They know that their visits are futile, but they say, "I am here only to talk to someone. I want to tell you how hard it is to get by, but I know you cannot do anything for us." Tonight the Government could do something for those people if they gave a commitment to study the incidence of poverty and if they realised that there was a relative condition of poverty. If that definition was returned to the political agenda, it would do a lot to improve the Government's credibility and to improve the welfare of our people.
We are all aware of the Government's lack of concern for the day-to-day needs of honest people, but I cannot believe that they are unaware of the inadequacy of the state pension. That pension does not allow pensioners to participate in society. To prepare for this debate, I studied a report produced by Eric Midwinter, of the Centre for Policy on Aging, concerning pensioners in London. He


analysed the involvement of pensioners in society and found that 2 per cent. of pensioners participate in adult education classes and 1 per cent. go to the cinema. One could argue that those percentages are low because many pensioners are infirm, but infirmity affects 4 per cent. only of those aged between 65 and 74 years. Pensioners' participation in adult education classes and their attendance at the cinema is low as they have been excluded from a social life because of poverty. The statistics are there for the Secretary of State to study.
Last week Age Concern told me of an elderly gentleman who buys items such as toilet rolls or washing up liquid every week as he must plan his budget on that basis. The Secretary of State fails to realise that to take a few pounds from such people represents a dramatic loss.
The Secretary of State has discussed occupational pensions. He should remember those individuals who receive an extremely small occupational pension. Some people who come to my surgery receive a pension of £20 a month, but, because of that, they are disregarded for other benefits. They find that they are worse off after a miserly rise in their benefits due to receiving a small occupational pension for which they have worked all their lives.
The statistics prove that pensioners spend less on fuel and housing, not because they can cope better, but simply because they cannot cope. In the past 12 years in Scotland 3,000 people have died from hypothermia. That is on their death certificates, but the figure may be even greater as doctors are reluctant to put hypothermia on the official forms. Nevertheless, 3,000 people have been officially recognised as having died from hypothermia, and surely that is enough for the Secretary of State to realise that there is a great problem.
We should not concern ourselves with any academic debate initiated by the right hon. Member for Croydon, Central. We should be determining the appropriate pension level on which people can live. We should face up to the reality that our pensioners die younger than elsewhere in Europe or in the United States because they receive insufficient money on which to live every week. There is no doubt where the blame lies.
The King's Fund Research Institute looked at statistics produced by the World Health Organisation and its conclusion was clear enough when it spoke of
severe poverty and disadvantage among a substantial minority
of British pensioners. The Government have studiously ignored that substantial minority.
The Government should consider why 50 per cent. of our pensioners must depend on means-tested benefits. In a comparison of present pension levels as a proportion of average earnings, Britain is bottom of the European league. We spend less on social security—on which 50 per cent. of old people depend—relative to gross domestic product than any other country. The proportion is getting smaller month by month.
Pensioners are also dependent upon key services which are under attack from the Government—the Health Service, housing and transport. Pensioners have seen cut not only their living standards but the link between average earnings and pensions. Is that miserliness or mendacity? Who knows?
If pensioners cannot get what they need, they must go to the social fund. The recent changes in that fund show that the number of social fund payments represents a third

of what was paid out under the single payment regime which operated before the Social Security Act 1986. I have spoken to the staff in social fund offices in Scotland. When people approach the officers for help, they are asked, "Can you pay it back?" If it is judged that they cannot pay back the money, help is refused. They also consider whether applicants will be dependent on the state in future or whether they will go into an institution. If a person is institutionalised, the money will be paid out, but if that person plans to stay in the community the money will not be given as such people are considered a burden on society. That is the reality behind the social fund in Scotland; and the same is true in other regions.
The Government cannot escape their responsibilities because social fund officers deny that money in the Government's name. The number of claimants has reduced, but there has been no corresponding reduction in the needs of society; rather those needs have increased.
The Government talk about targeting, but that is yet another euphemism for cuts. Pensioners in Scotland already face difficulties with the poll tax, which has yet to come into operation in England and Wales. A Scottish pensioner couple on income support will be worse off in any area where the poll tax is more than £299. The Government have made transitional arrangements to pay £3 per week in assistance, but that arrangement is based on a notional tax figure; it is not based on actual tax. Such arrangements will result in increased hardship.
My hon. Friend the Member for Birkenhead (Mr. Field) said that under the Labour Government the value of pensions rose by 20 per cent. in real terms. The Secretary of State had no adequate answer to that. If pensions had continued to rise by a similar amount under the Government a single pensioner would be £12 better off and a married couple would have received £18 a week more.
The Secretary of State should take up the issue of poverty. The Government should recognise what elderly people require not only to live on but to participate fully in society. They need that money to heat their homes, to have a healthy, varied diet and to afford decent clothing. We are witnessing the erosion of their living standards.
The Bill is a nonentity as it does not address poverty. It takes us further along the path set in 1986 and, as such, it deserves to be thrown out.

Mr. Peter Thurnham: The hon. Member for Oldham, West (Mr. Meacher) made an extraordinary speech, which contained many promises. He attacked the Bill for being incoherent, but his speech was guilty of that.
The hon. Gentleman must have had his beady eyes on the £50 billion accumulated in private pension schemes and I assume that he saw that as a source of money for providing the comprehensive disability scheme that he described. He did not quantify the money involved and it is significant that when the Labour party was in power it failed to introduce such a scheme.
This is an important week for the disabled in Parliament. We have today's debate and another one on Wednesday. Tomorrow the Autumn Statement debate will indicate the public funds available for the next three years. The Bill covers both pensions and disability benefits, as well as the insulation grants scheme. The Opposition say


that the Bill does not go far enough, but it already overlaps the important National Health Services and Community Care Bill which is being discussed in Committee.
I wish to speak mainly about the aspects of this Bill dealing with the disabled, but I shall first touch on some other aspects. The insulation grant scheme allows for advice to be provided. Will that advice extend to cover problems of dampness? I have seen far too many council houses in my constituency with severe damp problems. The council is far too quick to condemn tenants for their lack of housekeeping and blames condensation and fuel poverty as the cause of the dampness. In many cases, the causes are much more fundamental: lack of damp proof courses, leaking roofs and gutters or, worse still, major structural defects. There are even cases in which houses have been built over water courses. The tenants should have a good source of independent advice.
The Bill's long title suggests that it covers a host of social security matters. Only yesterday, I did an early morning radio broadcast. I was asked by the Salvation Army in Bolton to raise the issue of social security payments for hostel tenants. I do not know whether my right hon. Friend the Secretary of State is aware of the large £7 million deficit which is being run up by the Salvation Army. I should be grateful for any suggestions of help he can offer.
Anyone responsible for running a pension scheme would be terrified by some of the points made by Opposition Members, especially by the hon. Member for Oldham, West. The thought that someone can grab the £50 billion accumulated savings in the pension schemes and use them for other purposes and the assumption that employees can have something for nothing—a pension without having to pay anything in—are ridiculous. We must remember that every pension has a price. The Confederation of British Industry has rightly said that extra costs and less flexibility for pension funds could well mean a loss of jobs. I should like to pick up the point made by my hon. Friend the Member for Beverley (Mr. Cran) about the need for small self-administered pension schemes to have full flexibility.
Opposition Members have called for a lot more on disability issues than exists in the Bill. The hon. Member for Oldham, West promised an unspecified amount for a comprehensive disability benefit. Why did not his own party do that when it was in power? Why does he not specify the amount that he has in mind? The right hon. Member for Stoke-on-Trent, South (Mr. Ashley), who has done so much for disabled causes, says that he wants gigantic steps to take the disabled into the 1990s.
Opposition Members have condemned the Bill for not going far enough, but the Government have gone much further than did the Labour party when it was in power. Total spending on the long-term sick and disabled is now £8·3 billion—100 per cent. above the real level of Labour spending—and there is an increase each year of 75 per cent. more than the increase provided when the Labour party was in power. I, too, should like there to be more spending for the disabled, but the Bill's measures should be welcomed and not criticised. Surely Age Concern was wrong to say in a letter dated 19 January which I received today from Jane Clarkson, parliamentary officer:

we believe that these measures should not be introduced until a comprehensive review of benefits and proper consultation have taken place.
That is absurd. Why should 58,000 terminally ill people have to wait for consultation when the Government are offering them £35 million now? They will not be alive to know the results of further consultations if the Government have to wait instead of acting now.
The hon. Member for Bradford, West (Mr. Madden) criticised the Bill because it benefited only 1 million people instead of the 6 million people who suffer from some sort of disability. Surely it is far better to provide some benefit now and then consult further in the future. The Disability Benefit Consortium says that it is angered by the White Paper. I am sorry to hear that comment. Surely the Government have been right to commission the Office of Population Censuses and Surveys' survey as the bedrock of future intelligent discussion about the further development of the benefit structure.
The White Paper calls for comments from the disability groups, but I am sure that my right hon. Friend and his colleagues intend to go further than hearing comments. I hope that they will want full consultation and that my right hon. Friend will confirm to Mencap and other organisations that full consultation with disabled persons and their organisations will take place to determine the development of new benefits.
The OPCS surveys cast light on our ignorance of the disabled. The number of severely handicapped children in institutional care because their families cannot care for them was provisionally estimated at 2,500. The survey shows that there are more than 5,000 children in institutional care. The first OPCS survey shows that there are more than 200,000 people in the most severely disabled category—category 10—but that half of them are living at home and being looked after by their families. If my right hon. Friend and his colleagues would like to visit Bolton, they could see just one of my constituents, a severely disabled young adult called David Cummings, being looked after by his family and would appreciate the need for more benefits and services. The OPCS survey showed that 70 per cent. of disabled people live on 75 per cent. or less of average incomes, but their living costs are above average.
Public opinion will not allow a two-tier benefit structure to continue. Under such a system those with legal claims or industrial injury benefits have a relatively high income, while many of those whose disabilities arise as an accident at birth or who cannot make claims for compensation have to exist on a standard of living which is far too low, by any reckoning.
The Bill is right to bring in some benefits without delay. I look forward to further steps being taken in full consultation with disability organisations to provide the further benefits which are so desperately needed. Voluntary unpaid care in the community has been valued at about £12 billion per annum. Much more of that should be paid by the taxpayer. The challenge facing us all, especially the disability groups, is to accept each step as a positive development, while working with the Government to gain full public acceptance for further increases in disability benefits within the limits of the increasing expenditure which a successful economy can afford. I support the Bill and welcome its provisions.

Mr. Max Madden: Anyone wanting to know the views of disabled people and others on the Government's record and the Bill should have been with my hon. Friend the Member for Leeds, West (Mr. Battle) and I outside the luxurious offices of the Department of Social Security earlier today. I was strolling towards my office when I saw a large group of people. I subsequently learnt that many of them were from the National Federation of the Blind, the Disability Alliance and other disabled groups. They were with guide dogs and in wheelchairs, and were extremely angry. They were handing in a petition to the Department.
I remind all taxpayers that we have spent about £50 million building luxurious offices in which Ministers of the Department of Social Security preside over this country's social security system. The Government spent £400,000 on paving stones around the offices, and the expenditure that caught my eye was the £40,000 for pot plants and other adornments for the offices.
This morning the petitioners were handing in a petition headed, "The way ahead for disabled people? Or a way out for the Government?" It stated:
The Government has failed to understand the needs of disabled people.
The Government has failed to respond to the gross inadequacies in current benefit and service provision for disabled people.
The Government has failed to accept that the way to eliminate poverty amongst disabled people is by the introduction of a comprehensive disability income scheme.
They handed in the petition and spoke to a small group of journalists who were there to record its presentation.
Next, a group of 20 or 30 people started walking across Whitehall, and in the middle they decided to stop. For 15 minutes they held up the flow of traffic from Trafalgar square to Whitehall, protesting about the Government's record on helping the disabled, protesting against the inadequacy of this Bill, and affirming their rights.
I spoke to a number of people who told me that this was the only effective action that they could take, and that nobody would listen to them unless they took it. Newspapers and television and radio, they said, rarely report anything that they do—unless they take this sort of action—and Ministers take no notice either.
As other hon. Members have said, this is a miserable failure of a Bill; in no way does it meet the challenge that the Government face after 10 years in office. In 1979 the Government's election manifesto said that they wanted to
move towards a coherent system of disability benefits … as rapidly as the strength of the economy would allow".
Since then, billions upon billions of pounds have been given to the richest in the land, to people who do not need the extra money. Billions have been spent on arms, and in the past 12 months we have seen that that expenditure was wholly unjustified—as the vast majority of people now recognise. They want the resources spent on those who are most in need—those whom we are discussing tonight.
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) complained about ministerial sleight of hand and about being hoodwinked by figures given to the House about new money which, on investigation, turned out to be old money. He had every justification for complaining. I shall point out three measures that the Government have slipped through by stealth, with no approval—still less discussion—by the House. They will hit many of our constituents hard in the coming weeks and months.
The Secretary of State referred to the statutory sick pay scheme and gave the impression that these changes were marginal, affecting only a few people. I do not take that view; I understand that in April the Government are introducing changes to the scheme which will affect more than 2 million people who depend on statutory sick pay for help in the event of falling ill. I understand that those who earn between £46 and £83 a week, and who now receive £36·25 a week under the scheme, will get an increase in April of £3, to £39·25. Those earning £125 and above and who now receive £52·10 will get an increase of 40p in April, to £52·50. But the group of people about whom I am most concerned, those earning between £84 and £124 who now receive £52·10, face a cut in April to £39·25—a drop of £12·85 a week. I am advised that that will save the Government—or rob our constituents of—about £70 million or £80 million a year.
I come now to the changes made to the entitlement to unemployment benefit of those forced into short-time working. I have raised this matter several times recently in debate and in parliamentary questions. There are 9,000 workers on short time in the textile and clothing industries, many of them in Bradford. If they earn more than £43 a week they will not be able to apply, as they have done in the past, for unemployment benefit to top up their wages. I wonder whether Ministers in their luxurious offices could live on £43 a week. I doubt it. Most of them spend much more than that on lunch every day, yet my constituents and thousands of other people on low incomes who are forced into short-time working because of trading conditions will be compelled to live on that sum and be unable to receive the unemployment benefit that they formerly got.
I have read the proceedings of the Committee that dealt with this matter and discovered that no Minister mentioned that many short-time workers would be adversely affected by the changes that crept in on 10 December.
Probably few hon. Members have heard of the welfare milk scheme. I had not until I started receiving a stream of letters from those who deliver our milk daily and from a number of organisations which are concerned about the likely effect on recipients of not receiving welfare milk on the doorstep.
The welfare milk scheme has been in existence for 40 years. It sets out to provide free milk to pregnant women, single parents in receipt of family credit who have children under five, and the long-time unemployed. These people are provided with a weekly token which can be exchanged for seven pints of milk. The milk is usually delivered by a roundsman, although tokens can be used in shops and supermarkets. Tokens have a nominal value equivalent to the suppliers' current normal retail price. Typical doorstep prices outside London result in a token value of seven times 30p, which is £2·10.
Without discussion in the House, still less with real negotiations with the industry, the Government are proposing to reduce the amount of the token value to the roundsmen, making it uneconomic in many constituencies, including mine, for the milk to be delivered daily to the doorstep. That will result in roundsmen going out of business, especially in areas where they are financially dependent on supplying welfare milk, and many pregnant mothers and women with large families will be forced to buy their milk daily at the supermarket or corner shop, with all the inconvenience of having to bring it home. I


understand that these changes will be introduced on 28 January, and I urgently appeal to the Minister to make it clear that that will not happen.
I am indebted to Mr. J. T. Blackburn, managing director of Northern Dairies, who wrote to me earlier this month as follows:
In areas of high density of welfare milk tokens, which admittedly affect a relatively small number of rounds, the introduction of this discount could threaten the viability of the service. For example, we are aware of customers of ours who collect over 200 tokens per week. The impact of the proposed discount of 21p per token is to reduce that individual's income at worst by £42 per week. This could make the difference between viable or non-viable business in areas where doorstep delivery is often already not without its difficulties.
I urge Ministers to get a grip on this matter. I am aware of correspondence sent out by bureaucrats in the Department in which they claim that these matters have been extensively discussed with the the trade. My information is that that is untrue. Ministers must suspend the scheme that is due to take effect later this month so that proper negotiations can take place.
My last point is about elderly people in Bradford. We are involved in great controversy over the council's closure of 12 elderly persons' homes. Local residents have attended two large public meetings about Upper Syke home and made clear their wishes in a community ballot. Of more than 1,000 people who voted, 97 per cent. voted to keep Upper Syke as an elderly person's home and to keep the grounds round it as an open space. They did not want it sold for development into eight luxury bungalows that will sell for £250,000 each. That home and the others should be kept.
I have been told about a gentleman aged 87 who is of Ukrainian origin and speaks little English. He suffers from a range of physical complaints that plague him daily with a great deal of pain. He has been in care—if that is the right term—of Bradford social services for the past fortnight. His neighbour wrote to me and said:
The arrangement was that an attendant would come to him three times daily, and alas, this has not happened.
On Saturday morning one visit included a breakfast, (porridge only) and a few sandwiches for later, a repeat performance occurred on Sunday morning after a lapse of 24 hours.
This morning I inquired why this was and was informed that this is regarded as weekend cover.
I think you will agree that this is totally inadequate for a person this age, and whose mental confusion can lead to tragic consequences, especially when left alone for long periods.
Although he is waiting for a place in which he can be given respite care, this has not so far been available, and the events leading up to it are turning out to be dismal.
I spoke to that neighbour tonight by telephone and was told that the old gentleman is still in exactly the same plight. He has every right to proper respite care, which was available at Upper Syke and which would be available at the other homes if our Conservative-controlled council were not busy selling them off at less than market value.
I hope that Ministers will heed what has been said in debate and will not ignore it as the blind, the disabled and others who were outside their offices this morning were ignored and will continue to be ignored unless they take action. The Government will have great difficulty painting those blind and disabled people as Left-wing extremists, subversives and agitators. They speak for the decent

people of this country who want resources put into the pockets of those who are most in need and not into the pockets of rich and privileged people who can look after themselves. That is the message of the debate. For 10 years the Government have turned a deaf ear to that message and I plead with them to heed some of the points made in the debate. I hope that they will pay heed quickly, not for our sake but for the sake of those whom we seek to represent.

Miss Emma Nicholson: In his statement of 10 January my right hon. Friend the Secretary of State for Social Services identified three main strategic needs. He said:
The third is to help those disabled people who can and wish to work by making it easier for them to keep or take up jobs."—[Official Report, 10 January 1989; Vol. 164, c. 941.]
He went on to describe the two new benefits by which he would achieve those goals. One was the disability allowance which would address itself to the care needs and mobility needs of those of working age and below, and the other was the disability employment credit which is aimed at supporting those in work and those who would like to work and could do so but whose earning capacity is low. That followed his October 1989 package which aimed to improve the benefit structure for those who choose to go on to employment, rehabilitation courses or beneficial employment.
In this debate the Secretary of State spoke of his desire and purpose to help those for whom the system does least at the moment. To me, that shouts immediately about the young disabled seeking work and I want to bring to the attention of the House some small points which might sink into people's hearts and minds and make them think a little harder about how the Secretary of State can achieve his goals.
Only one third of young disabled people seeking work after leaving school or college manage to find it. That compares with nearly three quarters of their peers—the non-disabled of the same age group. Some 51 per cent. of them end up not in work or in youth training schemes. That is one in two, whereas less than one fifth of the non-disabled find themselves in that position—17 per cent. This is where the issue impinges on the Secretary of State. Some 49 per cent. of the young disabled rely on social security benefits as their main source of income, and that compares with 16 per cent. of the general population. All those people had less than half the income of those with a job—£31 a week as opposed to approximately £78 a week. I take issue with Opposition Members because poverty and disability are relative. I have just been in India where the definition of poverty is different from the definition here. I strongly support the Secretary of State when he talks about relative poverty. There is also relative disability.
The tragedy for these youngsters is that most of them want and deserve to work and they have much to offer. Disabled people have great motivation, an ability to plan and a knowledge of how to use scarce resources to reach a goal in a prescribed time. They are good at those things, because for them they are the stuff of everyday life. They may have a lower physical or mental capacity than other people, and in order to achieve their goals they have to plan and work with scarce resources. Those are the hills that they climb every day.
Nearly 80 per cent. of all disabled people are unemployed compared with about 6 per cent. of the general population. I suggest that that is the real discrimination in our society and that we face a psychological barrier in society's perception of the disabled. The title of that popular BBC programme "Does he take sugar?" sums it all up.
The needs of the disabled are shared by three Departments—the Department of Health, which looks carefully at prevention and treatment, the Department of Employment, which cares for the job provision of the disabled, and the Department of Social Security, which, in today's world, defines how we treat people with needs other than those that we have ourselves. That is why the Secretary of State for Social Security has to be the brand leader in changing society's perception and in supporting the disabled in their initiatives to enter the outside world.
The psychological barrier is particularly profound in the world of work where employers deliberately turn aside from tapping this deep vein of marketable skills and energies, yet little is asked of the employer. The Disabled Persons (Employment) Act 1944 set a quota of only 3 per cent. of registered disabled to be met only by companies employing more than 20 people. In 1965, a total of 53·2 per cent. of companies met that target. In 1980 it was 35 per cent. and in 1989 it was 26 per cent. The percentage of employers not meeting the quota at all because they were issued with exemption permits—and that includes Parliament and the BBC—was 27 per cent. in 1965, while in 1986 it was well over half. One fifth of all employers neither meet the quota nor have permits. They just ignore the system. The scheme has failed the disabled and thus they are not registering.
In 1950 just under 1 million disabled people registered as opposed to 389,000 today. That is 1 per cent. of the total population. Perhaps our failure in offering employment to the disabled accounts for the huge gap between those who are registered disabled and the number that the OPCS survey found as disabled—6·5 million, more than 10 per cent. of our total population.

Rev. Martin Smyth: Will the hon. Lady confirm that Government Departments number among those organisations that have not employed their quota of disabled people?

Miss Nicholson: I know that Government Departments have not employed their quota of disabled people. Society as a whole has failed disgracefully.
Much is being done, and I am proud to support the Government's many initiatives. We have a fund for employers to adapt premises, which has been quite widely used, although not widely enough. We have a fund to provide for a disabled person's introductory period at work, which I welcome. There is a fund for special equipment—such as a wheelchair, or a computer for a blind person perhaps. We have a fares-to-work scheme for peole who cannot use public transport, and that, too, is a welcome initiative.
Into that pattern fall the large new proposals introduced by the Secretary of State. There is so much that my right hon. Friend can do. I call on him to undertake a large and widespread educational programme to change the public's perception of disability. I call on him to ensure that knowledge of his new initiatives is widely disseminated in a form or forms that disabled people

themselves can understand. Disability so often means lack of educational opportunity. Many deaf people cannot read properly or have other similar problems. Many blind people also have problems of perception.
I challenge the Department of Employment, and call on the Secretary of State to do the same in his leading role in this crucial matter, on the Disabled Persons (Employment) Act 1944. How many prosecutions have there been under that Act? None that I can trace. Although it is not a crime to be under quota, it is a crime not to take on a disabled person for the next vacancy when one is under quota. Who has been prosecuted? No one that I can find.
The Secretary of State for Social Security and his Department should take credit for the extent of their achievements to date. The Secretary of State is not present, but I believe that hon. Members on both sides of the House would agree that his perception and sensitivity have been great, although he has much more to do. I support the Bill.

Mr. Jimmy Wray: We have been told that we should congratulate the Government on the Bill, but, in my opinion, it is an absolute disgrace. Many of my constituents have written to me about the original version of clause 1, which deals with the attendance allowance. That has now been amended, and the person who suggested the six-month qualifying period must have been a Rasputin. The clause caused a great deal of concern and indignation to people who have watched their parents dragged out of bed by a rude, abrupt or abrasive doctor. As recently as 12 January I received a letter from one of my constituents to whom that had happened. Sometimes medical practitioners get it all wrong, and it is difficult anyway for them to determine whether a person will live or die. One of my constituents was told by the doctor whom she had called out that she should not be wasing his time—that she should not have called him out because an emergency call-out cost £40. That was on a Friday. My constituent did not bother to call him out the following Sunday and the patient was dead by Sunday night. People who live in poor areas tend to believe what their doctors say.
Last week another constituent wrote to say that her father had been reduced to tears by a doctor who had been called out to try to get the question of the six-month qualifying period out of the way. The Government did not change the clause because of compassion; they were shamed into changing it. In May I tabled an early-day motion which was supported by many of my hon. Friends who had also received letters from their constituents. It was some time before I received a letter from Lord Skelmersdale, who was very sympathetic and who told me that there were plans to change the clause.
What about the psychological effects of the provision on those suffering from terminal diseases? Some children do not like to tell their mothers or fathers—or any other member of the family—that their time is up. How will they claim the allowance? Is it not sad that the financial tally-up in the Bill allows for only 52,000 of the 150,000 people who are dying to claim, at a possible cost of £18 million? What about the other 100,000 people? And what about sons and


daughters who do not bother to tell their terminally ill parents or grandparents that they are not claiming any allowance? The Minister did not mention such cases.
Clause 2 deals with the age-related addition to the severe disablement allowance. What a pittance that is—at £10, £6·50 and £3·10. That illustrates the way in which we are treating the disabled. Look at all the legislation that has been passed about which nobody cares. People are not really interested. The Chronically Sick and Disabled Persons Act 1972 is one example. A great deal of time was spent amending that Bill and telling local authorities what they should do. The Disabled Persons (Services, Consultation and Representation) Act 1986 was introduced by my hon. Friend the Member for Monklands, West (Mr. Clarke). The Government gave the Confederation of Scottish Local Authorities instructions regarding that Act—that Scottish local authorities should implement only those provisions which did not involve expenditure.
That is why disabled people do not trust the Government. To implement that Act fully would have cost about £26 million. Thousands of pounds remain unclaimed under the Act and thousands of chronically sick and disabled people have never even been interviewed by the social workers of their local authority because there is a large backlog. The chronically sick and disabled do not owe this Government any favours.
The extent of poverty in this country is a scandal. I remember the miserable excuse that Ministers gave when we last debated child benefit, which has remained frozen for three years—that the Government do not want to subsidise people who do not need the benefit. The Government claim that they cannot afford to do that, yet they can afford to lose £1·6 billion by not lifting the national insurance ceiling for higher-paid workers and a further £2·1 billion by reducing the top tax rate from 60 per cent. to 40 per cent. That is how hypocritical they are.
When I was a regional councillor, I was chairman of the monitoring group in Strathclyde, and I remember how the disabled felt then. They produced a document called "Living in a Hostile Environment". Those disabled people were not looking for a pittance of £10, £6 or £3·10, but wanted an independent centre so that they could live a normal life. They wanted better access to local authority and private buildings. The proposals to improve access and to form advisory panels were not implemented because the Government did not make available money for that purpose.
Clauses 2 and 3 are a cause of concern to many disabled groups, especially the provision in clause 2 affecting attendance allowance, which is to be abolished, and the earnings-related element of clause 3. What will be done for the people who will suffer as a consequence of those measures? What will be done for those people who will lose security benefits and housing allowance? They have not been mentioned. Where will they go to? The poor suffer all the time.
What of the poverty that has been created by the Government? They have a golden opportunity to do something for the poor. Instead, they introduce in clause 10 insulation grants for low-income families. Last year, 16,000 people in Scotland had their electricity supply cut off. What will the Government do about that situation?
Why has this Bill of shame been brought before the House? It does nothing for the homeless or for those in poverty. Despite everything that has been said in this House, in London 30,000 people still live in cardboard boxes. What kind of heat insulation do they enjoy? The Bill should aim at clearing up the streets of London and of Scotland, where thousands of people are homeless and have little chance of getting a meal at night. Amendments to the Bill should have those purposes in mind. If the Government have any intention of acting, they should introduce a Bill of compassion and pay the money that is needed to resolve the problems that I have described.

Mr. Timothy Wood: I support the Bill for a variety of reasons. It improves the conditions of entitlement to attendance allowance, which is why I was surprised by the comments of the hon. Member for Glasgow, Provan (Mr. Wray). Although some of his criticisms relating to those who care for the terminally ill were justified, the Bill addresses them. He may disagree with certain details of the Bill's drafting, but it will bring a major improvement in an area that has been the subject of complaints that I and many other right hon. Members have received over the years.
I welcome also the modifications to the help available for the disabled. The Government have a good record, contrary to the suggestions made by Opposition Members, of increasing the money provided to the disabled over the past 10 years by more than 100 per cent. in real terms—and many benefits are given more efficiently.

Ms. Short: That is not true.

Mr. Wood: I believe that it is true.

Ms. Short: In fact, there has been a 90 per cent. increase in spending on the disabled, but 90 per cent. of that is accounted for by increased take-up of benefits that were in place before the present Government took office.

Mr. Wood: I thought that even the hon. Lady would be delighted at greater take-up of benefits for the disabled. A huge sum is being spent, and will continue to be spent, for that purpose.

Mr. Thurnham: Does my hon. Friend agree that the Opposition are being ungenerous in disputing the value of the Government's new measures? One of the benefits will allow a family with a disabled child to enjoy an income £65 more than anything previously in existence. It is untrue to say that there are no new benefits. There are, together with improvements to existing benefits. Together, they have brought about a huge increase in expenditure in real terms on disability benefits.

Mr. Wood: I agree absolutely with my hon. Friend's comments. The truth is that there are more benefits and that greater assistance is given to the disabled, which I welcome. I hope that in coming years help will be given as and when new problems are identified.
I welcome also the insulation grant scheme, which will give valuable assistance to low-income households as well as being an energy-efficient measure in itself. Together, those provisions are ample justification for the Bill.
I want to concentrate my remarks on occupational pension schemes, which have also been the subject of problems that the Bill seeks to address. I commend the


Government for developing pensions provisions over recent years. In moving away from the state earnings-related pension scheme, the Government recognised—though after it had been recognised by many actuarial advisers—that SERPS could hit major problems during the next century. It would be absurd to keep in place a scheme that might run into severe funding difficulties. It is no use making pie in the sky provision for the next century if, when it comes to the pinch, it cannot be financed. A number of actuaries responsible for examining pension schemes feel that the Government have still not moved far enough away from SERPS and that there are risks inherent in the level of commitment that remains even now.
At the same time, the Government have enabled and encouraged a wide variety of new private pension provision. In particular, they acknowledge the need to ensure proper job mobility. A considerable number of people, when contemplating a job move, were inhibited from moving because they were nervous of the effect that such action would have on their pensions. Despite the fact that that aspect was widely debated both within the pensions industry and within companies themselves, little was done until the Government took action. Therefore, the legislation covering portable pensions and company schemes is most welcome.
The Bill makes important improvements to the provision for and the protection of members of occupational pension schemes. I join my hon. Friends the Members for Ealing, Acton (Sir G. Young) and for Beaconsfield (Mr. Smith) in welcoming the proposal for a pensions ombudsman. The creation of that office would assist and reassure pension fund members who feel that they have been given a raw deal. At times, those members have gained the wrong impression, but it will be immensely valuable for them to be able to refer to an objective, independent observer of the scene. That would serve to increase members' confidence in schemes and in the trusts that run them.

Mr. Patrick Thompson: I wonder whether my hon. Friend has encountered cases similar to those that have affected my own constituents. When a firm is taken over by another, obviously existing pension rights should remain with the employees, but responsibility for them should move to the new employer. In such circumstances, difficulties can arise, which, in my own experience, are difficult to overcome. Will the new Bill help right hon. and hon. Members better to assist constituents who find themselves in the circumstances that I have described?

Mr. Wood: The ombudsman may be able to take up a difficult issue, and the Bill makes provision for when problems arise if a company takes over another and that company's pension fund is ended or combined with that of the company taking it over.
I hope that the pensions ombudsman will be required to produce an annual report. That would be immensely valuable as it would demonstrate the problems that arise. Many members of pension funds will believe that they have been mistreated in some way because they have insufficient understanding of how their pension fund operates. If the ombudsman can clarify such difficulties in

his report so that pension funds and their advisers can draw the necessary information to members' attention, that would be a great help.
The Government's intention to increase protection and to revalue pension fund rights for early leavers from pension funds because they move company or because their company is taken over is admirable. Improvements have been made in such arrangements, but they can be enhanced. They are being enhanced by the Bill.
The hon. Member for Oldham, West (Mr. Meacher) waxed long on whether pension fund provision could be increased completely to cover inflation. We have to reach a rather more careful balance than he suggested. We have to consider commitments and obligations to pension fund members, but we have also to consider the risks and liabilities that might fall on employers. It is all very well to say, when there is a surplus—I have some sympathy with what has been said about surpluses—that the first call must be to improve inflation protection, but it would be wholly unreasonable to say that if a pension fund is unable to meet all those things that people might desire, the employer could foot the bill. That would put a wholly unreasonable liability on employers in some circumstances.
While it can legitimately he argued that employers are good at providing pension funds for their employees, if we increase the risks and liabilities on employers excessively, they might be reluctant to provide pension funds. That applies to the changes that we have made with portability. Some of the attraction for employers, and some generous pension fund provision, has already disappeared. We must tread carefully so as not to kill the goose that lays the golden egg.
I cannot conceive of how the hopes and ambitions of the hon. Member for Oldham, West could be sustained, in view of the increasing commitment to pensioners. I believe that the pensions industry will be appalled at his commitment concerning liabilities that may fall on pension funds. It would be wholly unreasonable to put all those liabilities on pension funds and the companies that provide finance for them.
The Government are right to propose constraints on self-investment, but I wonder whether the relaxation concerning directors of small companies is sufficient. For a small company with four or five directors and two or three others—or perhaps slightly larger—the proposed constraint on self-investment may be excessive. That should perhaps be considered further in Committee.
The Government have taken several useful steps forward to ensure that we have improved pension provision, taking account of the desirability, in many cases, of employees moving firms. The Government have not followed the unwise course suggested by Opposition Members, who have said that we should put unreasonable and unfair obligations on pension funds or the employers who provide them. Overall, I am delighted to be able to welcome the Bill.
The Government's record on pensions and social security matters is good. The Opposition may scoff, but the finances available to pensioners, albeit on average, have increased substantially. I admit that that is substantially the result of occupational pension funds and the private savings of some individuals, but the Government, to complement that, have rightly concentrated their attention on helping those in most need who may not be properly provided for by occupational pension


schemes or savings. The Government have taken important steps to continue the policies they have pursued for the past few years.
I am worried, however, about people with small private occupational pensions. Some constituents tell me that, because they have small schemes, they are just above the level at which they can receive income support benefits and that they miss out on various passported benefits. We should encourage people to provide for their old age when possible through a pension scheme or private savings, but, if we create a system in which those who have done their best are deprived of benefits with the result that they are worse off than if they had not saved or taken out occupational pensions, we shall damage our policy of encouraging people to provide for themselves. Although I disagree with much of what Opposition Members have said, I thought that one element worth taking up. I hope that it will be borne in mind.

Mr. Thurnham: Does my hon. Friend agree that the greatest enemy of savings is inflation? That is one of the reasons why we should give priority to dealing with it. When Labour was in power inflation reached an average of 14 per cent. per annum, with a peak of 27 per cent. That is why it is so important for us to keep it strictly under control, so that the value of savings is not eroded; and that is why the people of this country have so much more confidence in the present Government's ability to manage the economy than they ever had in the ability of the Labour party to do so.

Mr. Wood: My hon. Friend is right. One of the most damaging experiences for pensioners was the substantial destruction of the value of their savings under the last Labour Government. Furthermore, modest pensions that appeared to be adequate turned out to be inadequate, because of the fall in the value of money engineered by the Labour party.

Mr. Patrick Thompson: I believe that the Government's spending on social security has now reached £1 billion a week. Can my hon. Friend envisage that amount being spent if the Opposition had been in charge of the economy for the past 10 years?

Mr. Wood: If a nation is not generating wealth, it is not possible to help those who are in need. One of the great developments over the past few years has been the generation of more wealth by our nation, which has enabled us to make adequate provision. That is revealed by the various figures giving the average position of pensioners.

Ms. Short: There is a steady growth pattern.

Mr. Wood: The hon. Member for Birmingham, Ladywood (Ms. Short) may say from a sedentary position that there is a steady growth pattern, but nothing could be further from the truth: the unsteadiness of the pattern is one of its characteristics, and often reveals which party is in power. I hope that such sedentary interventions will be treated with less than full regard.
I welcome the additions and modifications to the major social security legislation that has already been enacted. I look forward to their implementation, and hope that in the coming years it will be possible to make further

refinements to improve both occupational pension schemes and the provision for those who are most in need when they reach old age.

Rev. Martin Smyth: I shall not comment on the speech of the hon. Member for Stevenage (Mr. Wood).
This cannot really be described as an "election Bill"—except, perhaps, vis-a-vis the Opposition. Given the growing number of pensioners in the community, we must face the fact that there is a good deal of discontent among them and that they are asking for more. Some elements, certainly, have done remarkably well, but a large percentage, including members of the Public Service Pensioners Association, have been pleading with Members of Parliament to take their worries on board. If public service pensioners are worried, we must assume an even deeper concern on the part of those who are simply on state pensions—although their number may be declining proportionately—and we must ask whether we are doing enough for them.
I welcome some of the proposals in the Bill, and I echo the tribute paid by the hon. Member for Torridge and Devon, West (Miss Nicholson) to the caring attitude of the Secretary of State. Over the years, he has sought to improve provision generally. I agree, however, with the hon. Member for Bolton, North-East (Mr. Thurnham) about the comment by Age Concern that nothing should have been done until a review had been conducted. It may be thought, however, that it is better to give some people something until we have got everything right. We have been waiting since the mid-1980s for a comprehensive review of social security and the disabled, and I believe that disabled people feel increasingly dissatisfied that their cause has not been dealt with more speedily.
I want to mention two aspects of the Bill in particular. First, let me again make a plea for carers. At a meeting of the all-party disability group that I attended last week, a carer described the problems that she had had to face over the years in looking after a young disabled person. She welcomed some improvements in the system—as do we—but pinpointed a perceived need. She had been granted an allowance to care for her disabled child, and was later able to obtain qualified respite help. She then discovered that the helper was being paid £5 an hour, while the allowance with which she was provided worked out at only 15p an hour.
Surely that is not a proper benefit for those who carry the burden of community care. Does the Department really value a loving family relationship at £4·85 and then pay 15p for care, while paying £5 an hour to someone who comes in from outside, is not related to the disabled person and is not capable of the same individual, personal love? I ask for more attention to be paid to those who carry that weight, whether they are parents, sons or daughters—and some are themselves growing elderly.
An article in Saturday's Belfast Telegraph, headed "New benefits under scrutiny" and dealing with the disability allowance—which is intended to combine the old attendance allowance and the mobility allowance—observed:
So far from simplification, we seem to be due another complex benefit unless it is changed before 1992 when it comes in.


I can't help thinking that (praise God) I am strong and in sound mind, but can barely understand this lot.
As we are seeking to improve the benefits system, should we not bear in mind those for whom it is intended, and create simpler and more helpful arrangements for their needs to be met?

Mr. Rhodri Morgan: I want to refer particularly to clause 10, which mentions energy efficiency. I give it one small half-cheer, on a "better late than never" basis.
The Government must surely admit that the clause is an attempt to disinter energy efficiency from the knackers' yard into which it has fallen over the past 18 months. The Minister of State, Department of Energy is not here now, although he was earlier; he will probably recall the oral question that I asked him 11 months ago about the state of play regarding the collapse of the community insulation schemes for local authorities and voluntary organisations. The schemes enabled them to arrange draught proofing and loft insulation in the houses of low-income families.
The Minister told us about the high-powered negotiations that were proceeding between his Department and the Department of Energy to preserve the good work that had been built up under the scheme in the years it has been in existence, and the tremendous enthusiasm that must be maintained. We all knew, however, that, after the last of the community programme schemes disappeared in August 1988, employment training unfortunately came in. Community insulation was no longer of value in the mighty massage parlour that goes under the name of the Department of Employment—or the bureau of unemployment statistics. I am pleased to see that the Minister has now returned.
The Prime Minister used to heap praise on the noble Lord Young for bringing her answers while other Ministers brought her problems. I do not think that she says that now, but at that time he was thought to be the person who could dream up wizard wheezes for apparently bringing down the unemployment. When the Government thought that they had a good tale to tell about unemployment, all these bright ideas for killing two birds with one stone, achieving energy efficiency in low-income households on the cheap, and massaging the unemployment figures in a downward direction by giving everybody three days' work a week if they were under 25 and did not have family responsibilities—all that went by the board in August 1988.
The Secretary of State, perhaps understandably, tried to elide the 17 or 18 months that have gone by since then. In his introduction he said that when the community programme came to an end we would have to do something about it. But that was 17 or 18 months ago. This is one of the outstanding examples of interdepartmental cross-sterilisation, even for this Government. It has resulted in 18 months being taken to come up with a clause in a Bill. We welcome it on this basis, but it will take another few months for a scheme to become operational. But for the first time energy-efficiency projects in low-income households will be separated out from the employment training or community programme rules for giving temporary work to the unemployed.
I suppose it could be said that the Bill has some of the same characteristics as the policy on pension funds, income support and social security. The Government

cannot quite make up their mind what they mean by targeting and what they mean by generalised support for a wholesale objective—in this case, energy; in another case, prosperity in old age. In this case, what does targeting really mean? The Government do not want something that old-age pensioners or people on low incomes can regard as an entitlement; they themselves want to be Lord and Lady Bountiful distributing the windfall apples in the autumn and feeling very good about it. This is not an entitlement; it is a device from which the Government will extract the maximum benefit at the next election.
As it has taken so long, Ministers will have to excuse some scepticism on our part. We have to ask what the Bill is intended to achieve. What, after all, is a low-income family? Is it a family with a below-average wage? Is it a family on income support? Or should it perhaps be related more specifically to people in whose case the absence of heating will hurt most? That will not necessarily be the people on the lowest incomes. It may be people with children or with particular health or disability problems; or the oldest pensioners. They are not necessarily the same thing. A family comprising two people in their thirties or forties with no health problems and on income support would not be as much a priority as a couple with a much greater income and with four small children or something of a health problem. The Government need to tell us exactly how they will get round the problem of defining exactly what constitutes priority in the context of low income.
We also want to know more about the administrative mechanism that will be used. Will we have another fiasco like the student loan scheme? Can the Government tell us in what financial year they intend to come to an agreement with the contracting-out agency—clearly they intend to contract it out—to administer the scheme for them? We ought to know what is their target for getting something going. After all, they have told us that they have only £12 million this year because it is the tail end of the Department of Employment expenditure, but they have not told us what expenditure they will assume in a typical financial year when the scheme is up and running and when they have a contracting agency to administer the scheme for them.
We have been told that they have indicated to some of the voluntary agencies that might get involved a budget of £20 million in a typical full financial year. I shall be very glad if the Minister who replies to the debate says something about that matter. The proposals should be efficient in energy terms and in administrative terms, and not simply an attempt to say, "We have done something on the energy-efficiency front for low-income households" when, in the end, it will not amount to anything more than the neo-brutalism of the sadly-departed junior Minister at the Department of Health, who told everybody to lag their grandmothers' legs for winter. I hope that the Minister who replaced her will adopt a more profound attitude to the means of dealing with problems of hypothermia amongst the elderly, the problem of cut-offs for families with young babies to look after, and so on.
I want to make two final points. First, this appears to be a three-part scheme, starting simply with continuation of the draught-proofing and loft-insulation schemes that formed a classical part of the community insulation schemes that have been going for five or six years. The Bill contains a promise that it will go on to a stage two and a stage three. Stage two will involve cavity wall insulation


—not so far covered—room thermostats, improvements to heating systems, and so on. Will that be in the next financial year, or in the great blue yonder?
Finally, there is the reference—great so far as I am concerned, if it ever comes about—to advice and practical assistance as regards more efficient domestic appliances in low-income households. I am not sure how many low-income households have, say, dishwashers or freezers, but those which have should obviously have appliances that operate on a low-energy-consumption basis to keep electricity bills down. Obviously very few low-income households are in a position to buy new domestic appliances. For the purpose of achieving lower heating bills they usually buy the cheapest appliances, which are the ones that result in the highest fuel bills. When will this come about? Will it be in six or seven years' time? Or do the Government envisage it happening next year?
We want to know the aim of this scheme. Will the Government try to sell it, completely fraudulently, as a measure that will contribute to a solution of the greenhouse gases problem and the overall question of energy-efficiency improvement in this country? If that is the case, it is a fraud, because there is nothing in the Bill that indicates that energy consumption overall can be reduced. The poorer the family, the more likely it is that it will derive benefit from improved insulation for greater warmth and comfort rather than from reduced energy consumption.
If this is part of the great drive by the Prime Minister or the Secretary of State for the Environment to reduce Britain's contribution to the greenhouse gas problem, it is absolute nonsense. Yet again we are in serious danger of the Government merely confirming their overall policy on pensions, on social security and now on energy efficiency. They are walking straight into the trap of Reagan's America and creating a two thirds, one third society. This is energy efficiency for the under-class; we want a lot more than that.

Mr. Thomas Graham: I wish that we had a big blackboard in the Chamber tonight—we have heard so many facts and figures. However, we have not had much compassion from Conservative Members about what is happening to the ordinary men and women who live on state benefits. I was surprised to hear the argument about the relative poor here and in India. Do the Government not understand what poverty is all about? Do Conservative Members not walk the streets of their constituencies?
In recent months I have spoken to many organisations about poverty and about the struggle to live. The churches have got together to produce a document entitled "Hearing the Cry of the Poor", and subtitled "A Declaration by Church Action on Poverty." Some of the statements in the document are most revealing. The Church has not been known as a radical organisation, supportive of Socialism, but it is nevertheless concerned about what is happening to ordinary men and women in this country and to their families. The document states:
It cannot be right:

—that some have to survive on less than £60 per week while others receive pay rises of £3,000 per week.

—that benefit levels are so low that loans are needed for essential items.
—that more people are begging in the street.
—that young people are living in cardboard boxes ‖
—that the mentally ill are discharged from hospitals without adequate support.

It cannot be right:

—to cut taxes as an incentive to the rich but reduce incomes to spur on the poor.
—that economic growth is paid for by those excluded from its benefits."

The Minister and the Secretary of State must have read that document. It is an indictment of the Government if the churches are saying, "Enough is enough. It is time for the Government to do something to help the poor."
I believe that I know my constituents. I know the problems that they are experiencing because I have lived in poverty. I know what it is to use up a week's wages the day one receives them paying high rents, and for food and clothes. I challenge the Minister or any Conservative Member to answer some questions. My first relates to pensioners' food. What is the cost of half a dozen eggs, a loaf of bread, a large tin of beans and 2 lb of potatoes? If any Conservative Member can tell me the cost, I should be delighted to have their intervention.
I ask the Minister to answer these important questions because the Minister and the Secretary of State and their party's supporters should be asking the public, "What does it cost to heat your house?" How much is a bottle of Calor gas and how long does it last? What does a hundredweight of coal cost? I challenge any Conservative Member to tell me that, yet they should all know it if they claim to represent the people and especially the poor. How much does a gallon of paraffin cost and for how long does it heat an average-size room? How much does a week's electricity cost in Glasgow?
I challenge the Minister or any Conservative Member to answer my questions. Do Conservative Members know the cost of those essential commodities? I will even allow the Minister's civil servants to give her the prices, but I am sure that they will not. Until Ministers and Conservative Members in general understand the needs of our elderly people and of the families that we represent, the Government will never get their figures right or eliminate poverty or inequality.
What does a pair of shoes cost? I spent a full year leading a team investigating the needs of elderly people in areas of priority treatment—in places where deprivation was found in such multiples that even the Government recognised that they had to provide some money. We visited most of the pensioners' groups and asked them about the problems that they were facing. The pensioners' problems were simple. They could not afford to eat properly. They could not afford to buy proper food. They could not heat their houses. They could afford to heat only one room.
Does the Minister know where those areas are? I should be delighted to take the Minister or the Secretary of State to them if I thought that they could do something for the people there which would make it worth my spending time with them.
I have met elderly men and women whose suffering would have broken the Minister's heart. They could not go out to buy a pair of shoes when they needed them. They could not afford to buy a heavy overcoat in the winter. They did not have sufficient finances to clothe themselves, to heat their homes or to eat.
My local authority had to set up a winter care centre in Strathclyde. We had to take elderly people into a heated hall to give them bowls of soup. Who would have believed that in this day and age in Britain we would have to heat halls so that we could take our elderly folk there to give them bowls of soup? We had to do that because in the previous year people had died of hypothermia in their homes.
The Government recognise that there are areas of priority treatment, so why do they not recognise that our pensions are almost the worst in Europe? I have visited parts of Europe such as Germany and France. My mother and my mother-in-law are elderly and both live alone on their pensions. My late father fought in the war. I am not a warmonger, but I wonder who won the war. The Germans provide their folk with decent housing, decent health services and a decent education system. The German Government treat their elderly people with compassion, love and understanding. It is time that the Government realised that if we do not look after our elderly, there is nothing worth living for.
The Bill is a miserable package delivered by miserable people. I plead with the Government to have some goodness in their hearts and assist our people who are at the bottom of the pile. They should stop helping the champagne charlies and the designer-wearing wimps and help the ordinary people who put the Government into power. I hope that those same people will put the Government out at the next general election.

Mr. Michael Jack: I shall make a brief contribution to this important debate. I do not recognise the picture that has been painted from the Opposition Benches. As has been pointed out by Conservative Members, the payment of more than £1,000 million per week in social security benefits is a testament of the Government's concern for those in society who are in real need.
Clause 1 includes an act of great compassion. It makes the attendance allowance available at an earlier stage to those who are terminally ill, bringing an additional 58,000 people into benefit. That is a measure of how the Government are trying to improve the social security system. It is also a demonstration of the Government's commitment to organisations such as hospices. I should be grateful for confirmation that the attendance allowance will be available to people who are dying in their own homes as well as people in hospices. The greatest thing for somebody who is faced with death, perhaps through the tragedy of cancer, is the ability to die with dignity. Agencies such as the MacMillan nurses and other caring groups, who can be afforded by the availability of the benefit, will enable those people to die with dignity. I saw the type of nursing care that can be administered by those people when my father-in-law died from cancer of the liver. It is real care that counts and it is greatly appreciated by the families. I congratulate the Government on introducing the Bill.
I and other hon. Members have received representations about the position of carers and several hon. Members have referred to that this evening. Although the Bill does not specifically deal with that matter, I urge my right hon. and hon. Friends to think again about the various forms of help for carers. There seems to be a

difference between the treatment of those of retirement age and those who are below retirement age who care for loved ones. There should be some consistency. The Government, rightly, are encouraging those of pensionable age to contribute to society. They have removed the effect on a person's pension of his going out and doing some work. Work in the home—caring—is just as valid as work in the community for other rewards. If my right hon. and hon. Friends can find time in Committee to consider that aspect, it would be warmly welcomed.
The Government have recognised some of the growing pains caused by the increasing mobility of people with pensions. I am glad that the ombudsman and register provisions have been made. Many people who move from job to job sometimes forget that they have a pension entitlement. In a way, I am a little sad that the Bill does not go further. Some issues in the pension industry need attention—for example, surpluses in company pension funds and pension holidays. As the pension industry grows—encouraged by the Government, enabling people to make the right self-help provisions for their old-age—people will say, "Perhaps we, too, have some claim on the surpluses of the pension funds." If a company seeks a pension holiday, perhaps we should gain from that—[HON. MEMBERs:"Oh!"] Despite the derisory calls from the Opposition, I believe that that is right and proper. Anything that can be done to enhance the private provision of pensions allows more money from the state system of help for those without occupational pensions to be targeted carefully. There is still an underlying problem in that not enough people have good-quality company pension schemes.
I commend the Bill to the House. I congratulate the Government on making progress in their treatment of those who are in genuine need of help.

Ms. Dawn Primarolo: Unfortunately, in the Social Security Bill the Government are doing what they have done in many other Bills—they identify a vulnerable group and use it to disguise their meanness and their callousness.
I am sure that every hon. Member will welcome the automatic right to attendance allowance for those who are terminally ill. We need reminding of the debates on attendance allowance in other social security Bill Standing Committees. In 1987, the Committee on the Social Security Bill discussed the two qualifications then in place—the six-month qualification and the age bar, whereby any child under two, however severely disabled and however much care was needed, was not entitled to attendance allowance. I understand that the Minister has removed that age bar. By far the most sensible thing to do would be to abolish the six-month rule. Rigorous criteria on attendance allowance determine whether people qualify.
The Government are attempting to put into legislation an objective definition of "terminally ill". It is difficult to do that, because doctors' diagnoses vary. What is more, the legislation states that a doctor must be sure that a person is likely to die within the six-month period. What happens if, as occasionally occurs, patients recover from the diagnosed illness after the six months has elapsed and


they have been in receipt of attendance allowance because the doctor thought that they were terminally ill? Will such people be required to pay back the attendance allowance?
What happens in cases where the doctor cannot be absolutely sure that the illness is terminal? Who decides then, even though the person may be in agony? What happens if the patient does not accept the diagnosis, even though the family accepts it? What happens if the person says to the family that he or she does not want them to apply for attendance allowance? The family will be left in exactly the same position as before. The attendance allowance will not be claimed and yet the care will have to be undertaken. What happens if the doctor decides, for the best of psychological reasons and in his or her best judgment, not to tell the patient or the family that the patient is terminally ill?
I am dealing with a case now in which the doctor decided not to tell the husband, wife or family that the husband was terminally ill because the doctor felt that it was best for them. The family is making a complaint against the health authority and the doctor. What happens if there is no one to claim attendance allowance for supplying extra help and nursing to someone who is identified as terminally ill? This vitally important matter is fraught with problems that are not clarified in the Bill.
The provisions take the Government into incredibly dangerous territory, simply because they are too mean to say that the criterion for paying attendance allowance is whether the patient is allowed day and night provision. In recent statements, the Government have said that the next stage in developing their criteria and streamlining the system is to merge the mobility and attendance allowances. What happens with the definition within that of terminally ill? What happens if the doctor gets it wrong and the person is not terminally ill, but has been in receipt of attandance allowance? The Department has amazing powers in legislation to retrieve money that has been paid erroneously over any period.
It would be much better if the Government agreed that the criteria of day and night provision for attendance allowance was all that was required and that there was no need for a six-month qualification period or a legislative definition of terminally ill. The Government should give these people the money. They desperately need it and they deserve it. The Government will take us into an area of such complexity that they will cause great misery to the very people that they claim to want to help. Why cannot the Government give way on this point? Will it really hurt the Minister that much?

Ms. Clare Short: This is the 12th Social Security Bill introduced since the Government took power 10 years ago. That is more than one every year. It is important to set it in the context of the cumulative effect of the changes in benefits and taxes during the past 10 years.
We are all familiar with the way in which the Government have abused official statistics, which are manipulated and deeply unreliable. However, the speeches that we have heard from Conservative Back-Bench Members today about what has happened in the benefit system have no connection whatever with reality. The

realities are set out in a useful book by John Hills called, "Changing Tax: How the tax system works and how to change it". It is a handbook to help any of us to design our tax and benefit system. He reviews the combined effect of tax and benefit changes since 1979 and finds:
The cuts in direct taxes have been entirely paid for by cuts in the generosity of benefits ‖ Overall, the bottom 60 per cent. of the income distribution has lost, while the top 30 per cent.—especially the top 10 per cent.—has gained … The losses for the bottom 50 per cent. average out at nearly £8·50 per family"—
a substantial proportion of their net incomes—
while the top 10 per cent. have gained nearly £40 per family. Overall, the bottom half of the population has lost £·6 billion, of which £5·6 billion has gone to the top 10 per cent.; indeed, £4·8 billion has gone to the top 5 per cent.
That is the reality and it sets the debate in context, so let us hear no more about there being not enough money to go around.
Over the years the Government deliberately and systematically have taken away benefit after benefit and handed out the money in massive tax cuts to the wealthiest people in society. The Government are in favour of redistribution. They have redistributed massive wealth successfully and deliberately from the least wealthy to the rich.
Several hon. Members commented on the quality of the Ministers in the social security team and I agree with them. We probably have the nicest collection of individuals of any Department.

Mr. Bill Michie: I am not so sure about that.

Ms. Short: There is no doubt about it. I am willing to believe that some of the problems and worries that my hon. Friends outlined concern them, too, and that they struggle to do better, but they are a joke played by the Prime Minister on the wets, as she calls them, in the Tory party. She thought, "Let us find some of the nicest people, put them into a Ministry which is supposed to care for people and make sure that they do not have a cent. The Treasury is in charge and we shall force them to reduce the benefits to the poorest." These nice guys and one nice woman are forced to do the dirty work of the nastier elements in their party.
Clearly, the British people do not approve of or support the Government's strategy on redistribution from the least wealthy to the rich. It has been made clear in every opinion poll and every report of the survey of British social attitudes compiled since the Thatcher Government came to power that the British people think that our society has become too divided and too unequal. The various packages of change in our pensions and benefits arrangements introduced in successive Social Security Bills have created part of that growing inequality which the British people reject.
About a week ago the Prime Minister made an extraordinary speech about the needs of children of lone parent families. There is no dispute between the two parties that we should have a system that encourages fathers to maintain their children. We strongly believe that fathers should have an incentive to do so and mothers an incentive to claim. All the money paid out in benefits should not be clawed back, as happens now, which makes us deeply suspicious that the Prime Minister is not concerned about lone parents or children in those families,


but is simply seeking another cut in the benefit system. We sincerely hope that that is not so and that we can achieve all-party agreement on that part of the package.
In that speech the Prime Minister made an amazingly tasteless comment. She said that the attitudes of the 1960s caused the change in the family structure which had led to an increase in homeless young people in our cities. That was amazing, tasteless and disgusting. Her Government have deliberately deprived young people of any right to benefit, so that there is nothing for vulnerable young people, particularly those who have grown up in care and who have no relatives or friends to whom to turn if they get into difficulties. There are many of them on the streets of our cities and that shames our country. The Prime Minister is responsible for that.

Mr. Allen McKay: A young man in my constituency is celebrating his birthday today. He is one of two chidren in a one-parent family. This should be a day of great joy, but it is not. As he happens to be 19, he loses his income support and his mother loses family benefit. He has a choice between leaving technical college, where he is hoping to take a degree in metallurgy, or sponging on his mother and taking from his sister. Other than that he could take up a place on the youth training scheme and ruin his career.

Ms. Short: I had two such cases at my advice bureau last weekend. Two young men from poor families are struggling to do A-levels and hope to go on to university. They have hit the same barrier as that faced by my hon. Friend's constituent. They may have to leave college to go on some kind of scheme and they will therefore lose out in the future. What a way to run a society.
If the Prime Minister is concerned about the quality of life for lone parents and their children, or even if she is concerned about the cost to the Exchequer in benefits for such families, she might examine the poverty traps with which our system is now deeply riddled.
A useful briefing had been provided by the Gingerbread Association for One Parent Families. In its appendix it clearly shows that no allowance is made for the costs of child care, and a lone parent with two children must earn more than £150 a week to be better off than living on benefits. The system is nonsense as it traps lone parents and causes them to live on benefits when they do not want to. Under the Government the number of lone parents living on benefits has risen sharply. If the Government want to put it right, the answer is simple.
We shall be watching for the package that is introduced as a result of the Prime Minister's speech. Once we have that package, presumably in another Social Security Bill, it will become clear exactly what are the Government's intentions. I hope and pray that that package is not simply further cuts in benefit as that would be too cruel.
The Government's record and all the statistics contrast starkly with the detailed proposals set out in the Labour party policy review for a fairer system of taxes and benefits. It concentrates on creating pathways out of poverty for pensioners, children, lone parents, people with disabilities and the low paid. We aim to be in power in the 1990s and to leave behind the miserable and mean 1980s. We aim to organise a society based on fairness and opportunity so that everyone can participate as full citizens and can train, work and live in dignity. That is possible given the resources and wealth of our country, but

the Government have deliberately chosen to increase inequality. There have been many victims of that policy and many people are struggling to survive week in, week out, to provide enough food and heating for themselves and their families.
The Bill does nothing to create pathways out of poverty for anyone. I shall concentrate on its three major parts. We shall want to address many other issues in Committee, but I cannot attend to all of them tonight. The first part of the Bill implements part of the Government's woefully inadequate disability package which was announced recently. It seems to be announced, reannounced and re-reannounced by the Secretary of State every other week. Perhaps he is trying to give people with disabilities the impression that the Government are doing something to help them.
The disability package is set out in the White Paper "The Way Ahead". The blue cover should perhaps be taken as a warning that the contents are mean and disappointing. The Government will be aware of the deep anger and disappointment of all organisations representing the disabled about the proposals. It is no good the Government trying to suggest that there is something carping about Labour's attitude. Disabled organisations in Britain are bitterly disappointed by the package and angry that they have had to wait so long for so little.
For 10 years the Government have promised a review of benefits for people with disabilities. At first, they said that they could not move to implement their manifesto promise because they had no money. They had to continue to pretend that they had created an economic miracle, even though we all knew that that was not so; then they said that they had the money, but not enough information about people with disabilities. They commissioned the OPCS to provide a major survey which was published in six reports. The survey found that there were 6·5 million disabled people in Britain. The Government produced a package which they say will help 850,000 people, including 3,000 carers. There is no doubt of the anger of carers' organisations which were expecting some help and protection from the package.
The Government have completely ignored the needs of the biggest group of people with disabilities in this country—the 4·2 million people of pension age who have disabilities. They are the largest group, but constitute a minority of pensioners, the majority of whom are fit and well. For some reason, the Government have written them off. The package contains nothing—it is as though they had no needs. It gives them no help with the extra cost caused by their sickness and disabilities. The Government seem to have forgotten the pensioners who are completely excluded from any help.
The OPCS survey found that, on average, disabled people are £39 a week worse off than non-disabled people. It said that its figures should be treated with caution because it is difficult to measure the exact costs of a disability. The figures were challenged by other surveys which put the figure for people with severe disabilities as high as £66 a week.
It is obvious that if we want a civilised society which gives equal opportunities for people with disabilities, we must provide additional money to cover the extra costs of the disability so that those people are equal citizens. Disability and poverty should not be linked and should


not prevent people from having the opportunity to move about, participate in social life and be treated with equal dignity.
What we need for a civilised society is set out in Labour's policy review. If I had more time I should describe it in detail. However, it is available and I hope that Conservative Members will read it. The reason why the Labour party has got the policy right and the Government have failed is that we consulted the organisations representing disabled people before we put together our package.
What is most offensive about the Government's proposals on disability is that, having said that people with disabilities must wait until the Government had money, and then having said that they had money, the Government's package finds no new money and introduces cuts in some benefits to fund the package. I noted with care the way in which the Secretary of State described the extra costs and savings of the package. He well knows that, if projected far enough, it is a net minus package. He made that clear when he announced a £1 billion saving by the year 2025.
The Disability Alliance has trawled through the figures and estimates that
net 'new money' is actually a saving of £20 million.
This estimated saving does not take account of the projected saving of £350 million on the earnings-related addition to Invalidity Benefit. The eventual saving will, therefore, be dramatic.
The above figures"—
the Disability Alliance's figures—
are based on the Government statements in the October 1989 uprating statement and in The Way Ahead.
There is some possibility that the Select Committee will look into the costings of the package, and I hope that it does.
The Government's package for people with disabilities is clever. We would expect nothing less from the Secretary of State and his team. It appears to do something, but it is a con. It fails, and it fails to spend any extra money on people with disabilities. That is an outrage.

Mr. Tim Smith: Can the hon. Lady say what the costs would be of Labour's package for the disabled?

Ms. Short: We shall provide detailed costings of our entire programme before the next election, which we hope will be sooner rather than later—the work is going on now.

Dame Elaine Kellett-Bowman: Will the hon. Lady give way?

Ms. Short: No; the hon. Lady has just come in and has not been listening to the debate.
The second major part of the Bill introduces limited regulation of occupational and private pensions—

Dame Elaine Kellett-Bowman: The hon. Lady made an inadvertent error by saying that the Bill helps 3,000 carers. In fact it helps 30,000, and it would be a pity to leave that wrong on the record.

Ms. Short: I understood that there were 3,000—

Mr. Scott: There are 30,000.

Ms. Short: Good, but unfortunately that means that we can take that number off the total number of people with disabilities. I am grateful to the hon. Member for Lancaster (Dame E. Kellett-Bowman).
As I was saying, the Bill introduces limited regulation of occupational and private pensions, based on the February 1989 report of the Occupational Pensions Board. We are all well aware of the Government's general attitude to pensioners. The Social Security Act 1980 deliberately cut the link between state pensions and prices or earnings, whichever were higher—the scheme laid down by the Labour Government in 1974.
As a result, according to figures provided by the Library, single pensioners have lost £13·10 a week and married pensioners £20·70. Those figures are shocking. Conservative Members do not seem to understand that the British economy has grown every year since 1945—it did not start in 1979—and as it grows pensioners will fall further and further behind. As we become better off, they will become relatively poorer. On top of this, the Government have reduced the protection afforded by the state earnings-related pension scheme, which was introduced by the Labour Government with all-party support. There was a more civilised Tory party in 1975.
The effect on low-paid workers—overwhelmingly women—who are not covered by occupational schemes is that they return to poverty in old age. The Secretary of State has not realised yet that two thirds of all pensioners are women and about three quarters of them are forced to claim means-tested benefits. We constitute a majority of pensioners because we live longer, and we are forced to claim means-tested benefits because women are concentrated among low-paid workers and do not enjoy decent pensions. So women have low pay throughout their working lives and re-enter poverty when they become pensioners. Government moves against SERPS have exaggerated this problem. Our policy review commits us to restoring the link with earnings and to restoring and improving SERPS.
The limited regulation of occupational pension schemes in the Bill is largely welcome; we shall come to our detailed criticisms in Committee. We know why such regulation is necessary—because there has been a change in employers' attitudes to pension schemes. They now believe that, faced with a takeover, companies in difficulty can raid the pension fund and take back the money. Conservative Back-Bench Members have reflected that attitude tonight: surpluses exist for companies to take back and do not belong to the pensioners for whom they have been accumulated by agreement with the employers over the years.
This is a matter of enormous importance. The market value of British companies is £500 billion; the market value of pension schemes and pensions in insurance companies is £250 billion. So half the capital in Britain belongs to pension schemes. We need to regulate them more and exert much more democratic control over them to ensure that they are invested so as to benefit not only people's pensions but their regions, children and grandchildren. Detailed proposals are in our policy review and we shall give employees in companies 50-50 control, so that they can control the way in which pension funds are spent.
The third major item in the Bill concerns the new framework for grant-based energy conservation schemes. My hon. Friend the Member for Cardiff, West (Mr.


Morgan) has already spoken about that and there is no doubt that insulation and energy conservation are the most important steps that we can take to protect the environment and to make heating cheaper for people on low incomes. It is a superb programme and we should firmly embrace and encourage it. We are committed to it in our policy review and welcome the Government's new framework. However, we recognise that they had to introduce it because their disastrous employment training scheme has failed so badly.
We note that once again there is no new money. The £12 million that is available will be taken from the Department of Employment budget. It was already available for this kind of work but was not being taken up because the employment training scheme was incapable of doing the job.
Any reasonable person must conclude that the Bill is mean and duplicitous. It lets down people with disabilities and will take money away from them. It will do nothing to make up for the harm that the Government have done to pensioners and it introduces unfunded measures for energy conservation. I recommend as an alternative framework the policies outlined in Labour's policy review. As I said before, thank heaven the 1980s are over. We look forward to a better future in a fairer Britain in the 1990s under a Labour Government.

The Minister for Social Security (Mr. Nicholas Scott): I wish the hon. Member for Birmingham, Ladywood (Ms. Short) well with her dreams. I share with my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary the blushes at the compliments that the hon. Lady paid us. We learn to be wary of Greeks bearing gifts and we did not expect her subsequent remarks to bear out her compliments.
The hon. Lady spent much time talking about lone parents and homelessness, neither of which is addressed in the Bill. She dramatically oversimplified both those issues. They are matters which have not started in the recent past but have their origins decades or years ago and are immensely complex issues. They are related not simply to social security benefits but to all sorts of social and behavioural changes that have taken place in our society. Some of those changes may be welcomed by the Opposition while they may regret others. The Government are minded to address those matters constructively.
The hon. Member for Barnsley, West and Penistone (Mr. McKay) intervened in the hon. Lady's speech to talk about a constituent. Power is available to local authorities to pay educational maintenance allowances so that young people in the circumstances that the hon. Gentleman described can complete their education.

Mr. Allen McKay: The constituent is in receipt of a minor award of £600 a year. According to rules and regulations, that minor award has to run its three-year course before he may receive a major award for university.

Mr. Scott: The hon. Gentleman has made the position clear, but when he intervened he did not do so. I frequently encounter cases in which young people of that age are unable to complete their education because of the rules. In each case it is ignored that EMAs are available. If the hon.

Gentleman will write to me about details of the case, I shall ensure that my right hon. Friend the Secretary of State for Education and Science looks at it.
The hon. Member for Ladywood laid great stress on the argument that there is no new money in the package. I make it absolutely clear that it does contain new money. My right hon. Friend the Secretary of State made that clear in his opening speech. For every remaining year of this century there will be more money spent as a result of the disability package than there was before the package was announced. There will be £300 million of new money in 1992–93. That cannot be contradicted. The hon. Lady knows that it is true and should not continue to assert that it is not.
The House will know that the Department of Social Security is uniquely fortunate in being able to introduce at least one Bill dealing with social security matters every year. I suppose that all of them share one characteristic —this is about the only thing on which I agreed with the hon. Member for Oldham, West (Mr. Meacher), whose remarks were echoed by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)—which is their lack of theme. It is common for social security Bills to include a variety of matters. When I arrived at the Department I was told that social security Bills were normally described as Bills to amend mistakes—the vernacular was slightly different—in former social security Bills.
The Bill addresses some important matters. It is right that we should take a frequent look at social security legislation. The society in which we live is dynamic and changes frequently, and social security provision has to change as well. I welcome the fact that we can regularly examine the pattern of social security policy.
My right hon. Friend the Minister of State, Department of Energy, is here to listen to the energy aspects of the debate. We have taken on board a measure that the Department of Energy wanted to introduce, rather than introducing a separate Bill to cover that. The details of the scheme will be outlined in regulations introduced by my right hon. Friend the Secretary of State for Energy and the House will have ample opportunities to debate those in due course. There are provisions on tort, on widows arid on the recovery of penalties.
Three important subjects are covered in the Bill. First, more protection is afforded to the growing number of people in occupational pension schemes. Secondly, necessary, effective and logical changes are made in the national insurance fund and, thirdly, significant moves of profound long-term importance are made in the balance and structure of benefits for disabled people. I realise that some hon. Members who have taken a careful interest in the fortunes of disabled people and the structure of benefits for them are dissatisfied with what we have achieved, but I hope that the House will be prepared to examine in depth the structure that has been created, which I believe is infinitely preferable to the structure that it will replace in due course.

Mr. Thurnham: Will my hon. Friend confirm that he will have full consultations with the various disability organisations? Is not it important that those discussions should not be soured by talk of cuts from the Opposition, as that is simply untrue? Such talk sours the atmosphere just when we are trying to encourage public opinion to accept the need for greater disability benefits.

Mr. Scott: Now that we have put forward our proposals in the document, I expect my door to be open to disability organisations to come and discuss these matters. We shall need provisions both in this Bill and in a subsequent social security Bill and that will enable all those who are interested in the matter to have their say. I agree with my hon. Friend and, like him, I hope that that will be on the basis that the rules for consultation and discussion will be fair. I hope that it will be recognised that the Government are putting significant extra resources into provision for disabled people. Representatives of the interested organisations can come to talk about the priorities that people should have in these matters.

Ms. Short: Why did not the hon. Gentleman say that before?

Mr. Scott: As my right hon. Friend the Secretary of State said, nobody would have wanted us to withhold provisions for the terminally ill or the provision to include deaf and blind people in the provision for mobility allowance or other matters pending prolonged consultation. It took five years for the review of social security to reach the legislation stage. We did not want to wait, so we decided on a three-tier process. The most urgent matters were dealt with and announced by my right hon. Friend the Secretary of State in October. Some of the provisions in the Bill set the pattern for the longer term and in a subsequent Bill, to be introduced when there is time in our legislative programme, we shall legislate for the disability allowance and the disability employment credit. That is the right way to tackle the problem.

Mr. McFall: The Minister said that his door had been open. Earlier in the debate, mention was made of a powerful letter from Professor Peter Townsend regarding the human rights of the disabled, and of the fact that the Government have ignored that. Will the Minister's door be open to people such as Professor Townsend to go along and talk about the rights of the disabled—and in particular to those who have been advocating for years that the Government should adopt a definition of poverty so that we all know what people can live on?

Mr. Scott: My right hon. Friend the Secretary of State and I have already met representatives of the Disability Alliance, and I have met representatives of other organisations for the disabled. Anyone who has fairly observed my time as Minister with responsibility for the disabled will know that I always listen to representations with care and understanding—and that is true also of my right hon. Friend. I shall continue to do so, and I hope that there will be fair recognition of the resources that the Government are devoting to the disabled and of the better structure being put in place.
I disagree with the hon. Member for Ladywood when she describes the general position of pensioners in society today. It is not true that they have suffered increasing deprivation or poverty under the present Government. Their overall standard of living has increased by 23 per cent.—twice as fast as that of the population as a whole. The standard of living of pensioners who are totally dependent on state benefits has improved by 25 per cent. —faster than that of pensioners generally. The Government have concentrated help not only on pensioners as a whole but on those wholly dependent on state benefits as well.

Ms. Short: We acknowledge that pensioners not entirely reliant on state pensions have seen their standard of living improve. One reason is that SERPS is beginning to take effect, lifting more and more pensioners away from reliance on state benefit, which is precisely what we intended. Another reason is high interest rates, which the Government hope will be a temporary phenomenon. Nevertheless, the Government cannot hid the fact that they have deliberately cut the standard of living of pensioners dependent on a state pension.

Mr. Scott: That is not true. The hon. Lady and her right hon. and hon. Friends hate the fact that we have taken specific steps to target help at the poorer, older and disabled pensioners. That is why we have been able to increase their standard of living as well. If we were to follow Labour's pattern and spread extra money across the whole range of pensioners, regardless of the capital or other income they might have, we would be unable to help poorer, older or disabled pensioners in the way that we can. Targeted help is the sensible way forward.
We are concerned today not with the general position but with the Bill's provisions for occupational pensions. I am glad that my hon. Friends the Members for Ealing, Acton (Sir G. Young), for Beverley (Mr. Cran) and for Beaconsfield (Mr. Smith) were able to welcome the provision for an ombudsman. We are still considering with the industry how the costs of that innovation will be managed. However, I give a clear undertaking that the ombudsman will report each year, and that that report will be published.
I acknowledge the point made by my hon. Friend the Member for Ealing, Acton that, in the past, early leavers' rights were not properly protected. We are moving in the direction of improving on that situation. Too often in the past employers regarded occupational pensions as a golden ball and chain with which to retain employees, rather than given them freedom to move elsewhere.
The point was made that pensions should be made fully inflation-proof. My right hon. Friend the Secretary of State and I agree with that principle and that it is desirable that schemes should, wherever possible, protect not only early leavers but all those in payment against normal rates of inflation. It is a bit rich for the hon. Member for Oldham, West to accuse the Government of not going far enough. A Labour Government presided over far higher rates of inflation than have the present Government, but did nothing to protect the rights of those in pension schemes from the consequences. We have provided a minimum base, or springboard, for pension schemes through statute, but we want all schemes to protect members fully against inflation.
Pensioners want to know that, in retirement, they will have security. The hon. Member for Oldham, West nods, but in his opening speech he said that, in exceptional circumstances, a retired person on a pension with the expectation of a certain rate of pension might experience a cut because of exceptional economic circumstances. What sort of security does that give members of occupational pension schemes? I do not believe that the hon. Gentleman has thought through the implications of that rather rash statement.
The Labour party, by allowing inflation to reach such a high level, by changing the method of forecasting pensions and the method of calculating the rate of pensions when it took £l billion from them, and by twice


being unable even to pay the £10 Christmas bonus, altered pensioners' expectations without notice and affected their standard of living. Now the hon. Member for Oldham, West says that pension funds should have the right to cut the rate of pension that people can expect. I must tell the hon. Gentleman that if his promises were implemented and Labour were ever to get back into office, the stock exchange would react in such a way that there would be no surpluses in pension funds—he would be worried about coping with the deficits.
The House will have another, fuller opportunity to discuss disability in a couple of days' time, but I can tell the House that I am prepared to listen to representations on this issue. I must emphasise that the parliamentary process will provide ample opportunity for such representation.
I share with my hon. Friend the Member for Ealing, Acton the view that the structure that we are putting in place is one about which we can be confident. I do not share his view about the complexity of the system, however, bearing in mind what will be in place when the next social security Bill is enacted. As is suggested in "The Way Ahead: Benefits For Disabled People", mobility allowance and attendance allowance are to be combined and expanded to form a new disability allowance with common medical and adjudication procedures. The system will be much simpler.
Terminally ill people have been mentioned. I know that the issue is complex and that several hon. Members are concerned about it, but I hope that the House will recognise that we are right to move in the direction of removing them from the six months' waiting period. We are still discussing the implications of the move. We intend that anyone who is given the terminally ill allowance will keep it for life.
Carers have been mentioned. We have introduced a carers premium in the Bill. It should be recognised that, with the extension of attendance allowance, more people will gain invalid care allowance, which will help carers as well. We shall return to this issue. We recognise the important role that carers play.
Under this Government, expenditure on the long-term sick and disabled has gone up by some £370 million a year in real terms, compared with £220 million a year under Labour. The Labour party has attacked us today on the Bill. I hope that the country will recognise that having a social security Bill every year has two advantages. One is that we can observe the changes in society and trim and fine tune the social security system. The second is that we can force the Opposition to face up to the reality of some of these issues. Of course they will criticise us; once in a while they may even propose alternatives. The fact that those alternatives will turn out to be unrealistic and ruinously expensive for the country is something they do not like to think about. They are prepared to spend billions on earnings-linked retirement pensions, billions on disability and billions on SERPS. They will be doing just what Lord Barnett said that they did when they were last in government: they will spend two years' spending money that they have not got.

Question put, That the Bill be now read a Second time:—

The House divided:  Ayes 278, Noes 217.

Division No. 41]
[10 pm


AYES


Adley, Robert
Fenner, Dame Peggy


Aitken, Jonathan
Fookes, Dame Janet


Alexander, Richard
Forman, Nigel


Alison, Rt Hon Michael
Forsyth, Michael (Stirling)


Allason, Rupert
Garel-Jones, Tristan


Amess, David
Glyn, Dr Sir Alan


Amos, Alan
Goodhart, Sir Philip


Arbuthnot, James
Goodlad, Alastair


Arnold, Tom (Hazel Grove)
Gorman, Mrs Teresa


Ashby, David
Grant, Sir Anthony (CambsSW)


Aspinwall, Jack
Greenway, Harry (Ealing N)


Atkins, Robert
Hamilton, Neil (Tatton)


Atkinson, David
Hampson, Dr Keith


Baldry, Tony
Hanley, Jeremy


Banks, Robert (Harrogate)
Hannam, John


Beaumont-Dark, Anthony
Hargreaves, A. (B'ham H'll Gr')


Bellingham, Henry
Hargreaves, Ken (Hyndburn)


Bennett, Nicholas (Pembroke)
Harris, David


Benyon, W.
Hawkins, Christopher


Bevan, David Gilroy
Hayes, Jerry


Biffen, Rt Hon John
Hayhoe, Rt Hon Sir Barney


Blaker, Rt Hon Sir Peter
Hayward, Robert


Body, Sir Richard
Heathcoat-Amory, David


Bonsor, Sir Nicholas
Hicks, Mrs Maureen (Wolv' NE)


Boscawen, Hon Robert
Hicks, Robert (Cornwall SE)


Boswell, Tim
Higgins, Rt Hon Terence L.


Bottomley, Peter
Hill, James


Bottomley, Mrs Virginia
Hind, Kenneth


Bowden, Gerald (Dulwich)
Hogg, Hon Douglas (Gr'th'm)


Bowis, John
Hordern, Sir Peter


Boyson, Rt Hon Dr Sir Rhodes
Howard, Rt Hon Michael


Braine, Rt Hon Sir Bernard
Howarth, Alan (Strat'd-on-A)


Brandon-Bravo, Martin
Howarth, G. (Cannock &amp; B'wd)


Brazier, Julian
Howe, Rt Hon Sir Geoffrey


Bright, Graham
Howell, Ralph (North Norfolk)


Brown, Michael (Brigg &amp; Cl't's)
Hughes, Robert G. (Harrow W)


Browne, John (Winchester)
Hunt, David (Wirral W)


Bruce, Ian (Dorset South)
Hunt, Sir John (Ravensbourne)


Buck, Sir Antony
Hunter, Andrew


Budgen, Nicholas
Irvine, Michael


Burns, Simon
Jack, Michael


Burt, Alistair
Jackson, Robert


Butler, Chris
Janman, Tim


Butterfill, John
Jessel, Toby


Carlisle, John, (Luton N)
Jones, Gwilym (Cardiff N)


Carlisle, Kenneth (Lincoln)
Jones, Robert B (Herts W)


Carrington, Matthew
Kellett-Bowman, Dame Elaine


Carttiss, Michael
Key, Robert


Chalker, Rt Hon Mrs Lynda
King, Roger (B'ham N'thfield)


Chope, Christopher
King, Rt Hon Tom (Bridgwater)


Clark, Hon Alan (Plym'th S'n)
Kirkhope, Timothy


Clark, Dr Michael (Rochford)
Knapman, Roger


Clark, Sir W. (Croydon S)
Knight, Greg (Derby North)


Clarke, Rt Hon K. (Rushcliffe)
Knight, Dame Jill (Edgbaston)


Colvin, Michael
Knowles, Michael


Conway, Derek
Knox, David


Coombs, Anthony (Wyre F'rest)
Lamont, Rt Hon Norman


Coombs, Simon (Swindon)
Lang, Ian


Cormack, Patrick
Latham, Michael


Couchman, James
Lee, John (Pendle)


Cran, James
Leigh, Edward (Gainsbor'gh)


Critchley, Julian
Lennox-Boyd, Hon Mark


Currie, Mrs Edwina
Lightbown, David


Davies, O. (Stamf'd &amp; Spald'g)
Lilley, Peter


Davis, David (Boothferry)
Lloyd, Sir Ian (Havant)


Day, Stephen
Lloyd, Peter (Fareham)


Devlin, Tim
Lord, Michael


Dicks, Terry
Luce, Rt Hon Richard


Dorrell, Stephen
Lyell, Rt Hon Sir Nicholas


Douglas-Hamilton, Lord James
Macfarlane, Sir Neil


Dover, Den
MacGregor, Rt Hon John


Dunn, Bob
Maclean, David


Durant, Tony
McLoughlin, Patrick


Dykes, Hugh
McNair-Wilson, Sir Patrick


Evennett, David
Major, Rt Hon John


Fallon, Michael
Malins, Humfrey


Favell, Tony
Mans, Keith






Maples, John
Shaw, Sir Michael (Scarb')


Marlow, Tony
Shelton, Sir William


Marshall, John (Hendon S)
Shephard, Mrs G. (Norfolk SW)


Marshall, Michael (Arundel)
Shepherd, Colin (Hereford)


Martin, David (Portsmouth S)
Shepherd, Richard (Aldridge)


Mates, Michael
Shersby, Michael


Maxwell-Hyslop, Robin
Sims, Roger


Mayhew, Rt Hon Sir Patrick
Skeet, Sir Trevor


Mellor, David
Smith, Sir Dudley (Warwick)


Meyer, Sir Anthony
Smith, Tim (Beaconsfield)


Miller, Sir Hal
Soames, Hon Nicholas


Mills, Iain
Speller, Tony


Miscampbell, Norman
Spicer, Sir Jim (Dorset W)


Mitchell, Andrew (Gedling)
Spicer, Michael (S Worcs)


Mitchell, Sir David
Squire, Robin


Moate, Roger
Stanbrook, Ivor


Monro, Sir Hector
Steen, Anthony


Montgomery, Sir Fergus
Stern, Michael


Morris, M (N'hampton S)
Stevens, Lewis


Morrison, Sir Charles
Stewart, Allan (Eastwood)


Morrison, Rt Hon P (Chester)
Stewart, Andy (Sherwood)


Moss, Malcolm
Stewart, Rt Hon Ian (Hertz N)


Moynihan, Hon Colin
Stokes, Sir John


Mudd, David
Stradling Thomas, Sir John


Neale, Gerrard
Sumberg, David


Nelson, Anthony
Summerson, Hugo


Neubert, Michael
Tapsell, Sir Peter


Newton, Rt Hon Tony
Taylor, John M (Solihull)


Nicholls, Patrick
Taylor, Teddy (S'end E)


Nicholson, David (Taunton)
Tebbit, Rt Hon Norman


Nicholson, Emma (Devon West)
Thompson, D. (Calder Valley)


Norris, Steve
Thompson, Patrick (Norwich N)


Onslow, Rt Hon Cranley
Thorne, Neil


Oppenheim, Phillip
Thurnham, Peter


Page, Richard
Townend, John (Bridlington)


Paice, James
Townsend, Cyril D. (B'heath)


Patnick, Irvine
Tracey, Richard


Patten, Rt Hon Chris (Bath)
Tredinnick, David


Pattie, Rt Hon Sir Geoffrey
Trippier, David


Pawsey, James
Trotter, Neville


Peacock, Mrs Elizabeth
Twinn, Dr Ian


Porter, David (Waveney)
Viggers, Peter


Portillo, Michael
Waddington, Rt Hon David


Powell, William (Corby)
Wakeham, Rt Hon John


Price, Sir David
Walden, George


Raison, Rt Hon Timothy
Walker, Rt Hon P. (W'cester)


Rathbone, Tim
Waller, Gary


Redwood, John
Ward, John


Renton, Rt Hon Tim
Watts, John


Rhodes James, Robert
Wheeler, Sir John


Riddick, Graham
Whitney, Ray


Roberts, Wyn (Conwy)
Wilkinson, John


Roe, Mrs Marion
Wilshire, David


Rossi, Sir Hugh
Winterton, Mrs Ann


Rost, Peter
Winterton, Nicholas


Rowe, Andrew
Wolfson, Mark


Rumbold, Mrs Angela
Wood, Timothy


Ryder, Richard
Woodcock, Dr. Mike


Sackville, Hon Tom
Yeo, Tim


Sainsbury, Hon Tim
Young, Sir George (Acton)


Sayeed, Jonathan



Scott, Rt Hon Nicholas
Tellers for the Ayes:


Shaw, David (Dover)
Mr. Sydney Chapman and


Shaw, Sir Giles (Pudsey)
Mr. Nicholas Baker.




NOES


Abbott, Ms Diane
Beith, A. J.


Allen, Graham
Bell, Stuart


Alton, David
Benn, Rt Hon Tony


Anderson, Donald
Bermingham, Gerald


Archer, Rt Hon Peter
Bidwell, Sydney


Armstrong, Hilary
Blair, Tony


Ashley, Rt Hon Jack
Blunkett, David


Ashton, Joe
Boateng, Paul


Banks, Tony (Newham NW)
Boyes, Roland


Barnes, Harry (Derbyshire NE)
Bradley, Keith


Barnes, Mrs Rosie (Greenwich)
Bray, Dr Jeremy


Barron, Kevin
Brown, Gordon (D'mline E)


Battle, John
Brown, Nicholas (Newcastle E)


Beckett, Margaret
Brown, Ron (Edinburgh Leith)





Buchan, Norman
Janner, Greville


Buckley, George J.
Johnston, Sir Russell


Caborn, Richard
Jones, Barry (Alyn &amp; Deeside)


Callaghan, Jim
Jones, Ieuan (Ynys MÔn)


Campbell, Ron (Blyth Valley)
Jones, Martyn (Clwyd S W)


Campbell-Savours, D. N.
Kaufman, Rt Hon Gerald


Carlile, Alex (Mont'g)
Kennedy, Charles


Cartwright, John
Kilfedder, James


Clarke, Tom (Monklands W)
Kirkwood, Archy


Clay, Bob
Lambie, David


Clelland, David
Leadbitter, Ted


Clwyd, Mrs Ann
Leighton, Ron


Cohen, Harry
Lestor, Joan (Eccles)


Coleman, Donald
Lewis, Terry


Cook, Frank (Stockton N)
Litherland, Robert


Cook, Robin (Livingston)
Livingstone, Ken


Corbett, Robin
Livsey, Richard


Corbyn, Jeremy
Lloyd, Tony (Stretford)


Cousins, Jim
Lofthouse, Geoffrey


Cox, Tom
Loyden, Eddie


Crowther, Stan
McAllion, John


Cryer, Bob
McAvoy, Thomas


Cummings, John
McCartney, Ian


Cunliffe, Lawrence
Macdonald, Calum A.


Dalyell, Tam
McFall, John


Darling, Alistair
McKay, Allen (Barnsley West)


Davies, Rt Hon Denzil (Llanelli)
McKelvey, William


Davies, Ron (Caerphilly)
McNamara, Kevin


Davis, Terry (B'ham Hodge H'l)
McWilliam, John


Dewar, Donald
Madden, Max


Dixon, Don
Mahon, Mrs Alice


Doran, Frank
Marek, Dr John


Douglas, Dick
Marshall, David (Shettleston)


Dunnachie, Jimmy
Marshall, Jim (Leicester S)


Dunwoody, Hon Mrs Gwyneth
Martin, Michael J. (Springburn)


Eadie, Alexander
Martlew, Eric


Eastham, Ken
Maxton, John


Evans, John (St Helens N)
Meacher, Michael


Ewing, Harry (Falkirk E)
Meale, Alan


Ewing, Mrs Margaret (Moray)
Michael, Alun


Fatchett, Derek
Michie, Bill (Sheffield Heeley)


Faulds, Andrew
Mitchell, Austin (G't Grimsby)


Fearn, Ronald
Molyneaux, Rt Hon James


Field, Frank (Birkenhead)
Moonie, Dr Lewis


Fields, Terry (L'pool B G'n)
Morgan, Rhodri


Flannery, Martin
Morris, Rt Hon A. (W'shawe)


Flynn, Paul
Morris, Rt Hon J. (Aberavon)


Foot, Rt Hon Michael
Mowlam, Marjorie


Foster, Derek
Mullin, Chris


Fraser, John
Murphy, Paul


Garrett, John (Norwich South)
Nellist, Dave


Garrett, Ted (Wallsend)
Oakes, Rt Hon Gordon


Gilbert, Rt Hon Dr John
O'Brien, William


Godman, Dr Norman A.
O'Neill, Martin


Gordon, Mildred
Orme, Rt Hon Stanley


Gould, Bryan
Parry, Robert


Graham, Thomas
Pendry, Tom


Grant, Bernie (Tottenham)
Pike, Peter L.


Griffiths, Nigel (Edinburgh S)
Powell, Ray (Ogmore)


Griffiths, Win (Bridgend)
Prescott, John


Hardy, Peter
Primarolo, Dawn


Harman, Ms Harriet
Quin, Ms Joyce


Hattersley, Rt Hon Roy
Radice, Giles


Healey, Rt Hon Denis
Randall, Stuart


Heller, Eric S.
Redmond, Martin


Hinchliffe, David
Rees, Rt Hon Merlyn


Hoey, Ms Kate (Vauxhall)
Reid, Dr John


Hogg, N. (C'nauld &amp; Kilsyth)
Richardson, Jo


Home Robertson, John
Robertson, George


Hood, Jimmy
Rogers, Allan


Howarth, George (Knowsley N)
Rooker, Jeff


Howell, Rt Hon D. (S'heath)
Ross, Ernie (Dundee W)


Howells, Geraint
Ruddock, Joan


Howells, Dr. Kim (Pontypridd)
Sheerman, Barry


Hughes, John (Coventry NE)
Sheldon, Rt Hon Robert


Hughes, Robert (Aberdeen N)
Short, Clare


Hughes, Roy (Newport E)
Sillars, Jim


Hughes, Simon (Southwark)
Skinner, Dennis


Illsley,Eric
Smith, Andrew (Oxford E)


Ingram, Adam
Smith, C. (Isl'ton &amp; F'bury)






Smith, Rt Hon J. (Monk'ds E)
Walley, Joan


Smith, J. P. (Vale of Glam)
Wardell, Gareth (Gower)


Smyth, Rev Martin (Belfast S)
Wareing, Robert N.


Soley, Clive
Wigley, Dafydd


Spearing, Nigel
Williams, Rt Hon Alan


Steel, Rt Hon Sir David
Williams, Alan W. (Carm'then)


Steinberg, Gerry
Wilson, Brian


Strang, Gavin
Winnick, David


Straw, Jack
Wise, Mrs Audrey


Taylor, Mrs Ann (Dewsbury)
Worthington, Tony


Taylor, Matthew (Truro)
Wray, Jimmy


Thomas, Dr Dafydd Elis
Young, David (Bolton SE)


Thompson, Jack (Wansbeck)



Turner, Dennis
Tellers for the Noes:


Vaz, Keith
Mr. Frank Haynes and


Wallace, James
Mrs. Llin Golding.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Orders of the Day — SOCIAL SECURITY BILL [MONEY]

Queen's Recommendation having been signified—

Resolved,

That for the purposes of any Act of the present Session resulting from the Social Security Bill it is expedient to authorize—

(1) the payment out of money provided by Parliament of—

(a) any expenses incurred under the Act by a Minister of the Crown;
(b) any sums payable out of money so provided into the National Insurance Fund under the Act;
(c) any increases attributable to the Act in the sums payable out of money provided by Parliament under any other Act; and

(2) the making of payments into the Consolidated

Fund.—[Mr. G oodlad]

Orders of the Day — Toxic Waste Disposal (Tyneside)

Motion made, and Question proposed, That this House do now adjourn—[Mr. Goodlad.]

Mr. Neville Trotter: There are at present no toxic waste disposal plants in the north-east region, yet suddenly we are faced with at least three applications for planning approval to construct such sites. One of the proposed plants would be situated at Howden, in the middle of the Tyneside conurbation, surrounded by 1 million people. It is a joint venture by Northumbrian Water and the United States company ITC. That partnership is also putting forward a second, similar proposal for Teesside. The plan is to burn sewage and industrial waste together. It is described as economical. and much is made of the way in which it will consume sewage that is at present dumped by barge at the mouth of the Tyne. About 160,000 tonnes of sewage a year would be consumed, together with 83,000 tonnes of industrial waste. That is a lot of industrial muck to go to Howden which would contain a host of hazardous toxic substances.
It is proposed that that activity should take place in the heart of Tyneside, surrounded by 1 million people. The site would be unacceptably close to centres of population, in the middle of Tyneside with homes and schools nearby. The scheme is also in danger of damaging the regeneration of a wide swathe of Tyneside for which imaginative plans have been prepared by the urban development corporation. Those plans are not just about restoring derelict land; they are also intended to benefit existing adjoining communities. What a contrast that is with the proposals for a large toxic waste plant.
I am well aware of the prevalence of the attitude that has been described so well as NIMBY—not in my backyard. But here we are talking about a site in the backyards of close to 1 million people. It is utterly inappropriate for the purpose suggested and public opinion on Tyneside is wholly against the proposal. A petition was presented to me containing many thousands of names. I put a questionnaire through the door of every household in my constituency and, not surprisingly, only a handful of people replied saying that they were in favour of the scheme.
In its editorial, the Newcastle newspaper The Journal described the proposal as being geographically, socially and environmentally the wrong site. The chairman of the Tyne and Wear joint waste disposal committee has said that, in his judgment, the proposal is absolutely appalling and the site is totally unsuitable. Therefore, it is hardly surprising that the plans were thrown out on environmental grounds by the urban development corporation as planning authority.
Just before Christmas an appeal was launched. It was a sad Christmas present for Tyneside. A lack of civic responsibility was shown by those who again put forward a proposal that had proved to be so offensive to the local comnunity and that caused such grave public concern. Who is the best judge of the issue? The Government believe that waste disposal matters should be decided by local opinion. Local opinion has spoken with a resounding voice against this proposal.

Ms. Joyce Quin: Does the hon. Gentleman agree that the same objections—the lack of


consultation, the lack of taking people's views into account and the worries about siting such a venture in the middle of a built-up urban area—also apply to the proposed clinical waste incinerator at Wardley, in Gateshead, on Tyneside in my constituency?

Mr. Trotter: It is astonishing that there are presently so many proposals for plants such as these in the urban areas of the north-east. They have suddenly appeared from nowhere. The problem is certainly a serious one for the urban areas of Tyneside and Teesside.
I refer my hon. Friend the Minister to the speech made by my right hon. Friend the Secretary of State at the Blackpool conference. He said:
When I make planning decisions, I will always start from the assumption that local communities have an instinctive understanding of what their areas need and how they can best develop. I want local authorities, local communities, to take as many of the decisions about their character and their future as possible.
I commend those views in terms of the proposals for the north-east for toxic waste plants. Surely the best judge of the issue is the local community.
The chief executive of Northumbrian Water confirmed to me that there would be some PCBs—a particularly dangerous substance—in the industrial waste at Howden. He then tried to reassure me by saying that the incinerators would use the latest technology. Hon. Members will not be surprised to hear that I did not find that reassuring. I was surprised to hear only this afternoon that Northumbrian Water is now not proposing to deal with PCBs there. It is surely no coincidence that that announcement should be made on the day on which I am raising the matter in this debate.
Let us look into the figures. There may be no intention to deal with PCBs at Howden, but 80,000 tonnes of toxic muck will still go to the site every year. Only part of the sewage would be burnt in the toxic waste plant. Two thirds of that which is at present dumped off the mouth of the Tyne would still have to be dumped either in the sea or on land. Many water authorities dispose of their sewage by landfill. Some have no access to the sea. This proposal would leave most of the sewage to be dealt with by other means. Clearly, other solutions are therefore possible.
Only some of the hazardous waste would be fed into the incinerator. Half the 80,000 tonnes would go nowhere near the furnace. It would be taken to Howden and after being chemically treated the 15,000 tonnes left as a residue would be taken away and, presumably, disposed of by landfill somewhere else.
From where are all these nasties to come? One of the arguments put forward in favour of the plant is that it could be used for the burning of waste which is now burnt at sea—an activity which will be prohibited in future. It is surely extraordinary to suggest that, once banned at sea, this activity should instead take place in the middle of our Tyneside community. That it can be put forward as an argument in favour of the scheme is an example of the crassness of some of those arguing in support of the Howden plant. It is perhaps illuminating as an example of how they appear to approach environmental issues.
From where is all the muck to come? Northumbrian Water cannot tell me. The authority cannot say that it will definitely come from within our region. It cannot give an assurance that it will not treat waste from other parts of

the country, although, to be fair, it has said that it has no plans to import waste from overseas. The authority cannot say that about waste brought into the region from elsewhere. Northumbrian Water has told me that if local companies did not use the facility, it would find it necessary to take toxic waste from other parts of the country. I suggest that, against that background, the proposal can only be described as somewhat speculative. I remind the House that the same partnership has a similar proposal for a further huge toxic waste plant on Teesside.
Northumbrian Water stresses that this means of sewage disposal would minimise costs. I am sure that the people of Tyneside would willingly pay a little more to have the problem solved in other ways—to think otherwise would show an appalling lack of judgment. It is wholly wrong that such an issue should be decided on other than environmental grounds. Any extra cost of alternative solutions will have to be accepted.
There are some fundamental questions to be asked. What is the need for such massive toxic waste plants in the northern region? What is the scale of the existing problem? From where do the wastes come? What happens to them now? We do not know the answers. I do not know whether Northumbrian Water knows the answer, but certainly I do not. The information has not been made public.
There is great uncertainty, but what is sure is that Howden must be the wrong location for a massive toxic waste plant. There are only three or four toxic waste plants in the United Kingdom. None is in the north-east. The plans for at least three to be constructed in the north-east are astonishing. They envisage a massive increase in the United Kingdom's capacity to dispose of toxic waste. They will be among the largest such plants in Europe. It is hard to understand why the north-east should need so many such plants. I imagine that a great deal of money can be made from operating them. We must ensure that decisions are taken in the interests of the community on environmental grounds rather than for any economic reasons.
I understand that an appeal is now pending. I understand that therefore, in his reply tonight, my hon. Friend the Minister cannot comment on the arguments for or against the proposals. However, I urge him speedily to establish a public inquiry into all three applications. It is essential that the issues are aired publicly and fully. The water authority should have no fear of such an inquiry. It is only right that there should be a full examination of the issues involved.

Mr. Tim Devlin: Does my hon. Friend agreed that, in view of the applications on Tyneside and the four applications on Teesside, the time has come for the Government to decide a national strategy for the placing of toxic waste incinerators? As he rightly says, it is unacceptable for such establishments to be sited in major centres of population. We on Teesside are every bit as worried as the people of Tyneside about the prospect of such plants being sited in our community.

Mr. Trotter: My hon. Friend raises a most interesting point. I am very much in agreement with him. It must be right to have a national plan on an issue such as this. I hope that the Government will take that point on board. 
I am, however, worried about the blight hanging over Tyneside as a result of this most unfortunate appeal. I do not believe that there will be a national policy within the


timescale that is necessary if we are to remove as soon as possible the blight caused to the major redevelopment schemes which are planned for next door. Nor must we forget the ongoing fears of the local community.
I suggest to my hon. Friend the Minister that there should be a linked inquiry so that all the applications in the north-east can be considered together. We may not obtain a national solution in the timescale that we seek, but perhaps we can at least obtain a regional solution. I hope that my hon. Friend will give serious consideration to that proposal.
I hope that the inquiry will be held as speedily as possible. As I said, it is harmful that in the meantime there should be a blight hanging over our community. If all three applications are considered together, at least we shall establish the genuine requirements of our region and the best way of solving the problems.

Mr. A. J. Beith: Does not the hon. Gentleman fear that in some quarters a view is held that the north-east is a soft touch in these matters because the people are not aware of the environmental dangers? Does he agree that that view is entirely mistaken, as he highlighted by revealing the strength of feeling in north Tyneside? Does he accept that there is a great deal of support throughout the north-east region for the campaign being fought by north Tyneside on this issue?

Mr. Trotter: I agree entirely that the matter unites the community throughout Tyneside. I am sure that the same applies to Teesside. That reinforces my argument for a linked inquiry to consider the issue for the region as a whole.
I hope that my hon. Friend the Minister will confirm that environmental issues will be paramount in considering the appeal. I am confident that, if that is the case, the decision of the local community on Tyneside, expressed by the urban development corporation in refusing permission, will be upheld. The plans for the plant will end up in the dustbin, as they deserve.

The Parliamentary Under-Secretary of State for the Environment (Mr. David Heathcoat-Amory): I congratulate my hon. Friend the Member for Tynemouth (Mr. Trotter) on securing this debate on such an important topic. Waste disposal is a subject which some people find unattractive. That may be one reason why it has been neglected in past years. We do not make that mistake in the Environmental Protection Bill which is currently before the House. That Bill will contain major reforms to the present framework for control of waste management.
It will always be the case that waste disposal activities have a wide impact on our environment, and proposals for siting such facilities should be carefully considered. This is not the first time that my hon. Friend has raised the matter in Parliament and I pay tribute to him for his skill and persistence in ensuring that his constituents' anxieties are properly considered.
I know that the subject is of great interest to other hon. Members. The hon. Members for Gateshead, East (Ms. Quin) and for Berwick-upon-Tweed (Mr. Beith) have already intervened. I am pleased also to see that my hon. Friends the Members for Darlington (Mr. Fallon) and for Stockton, South (Mr. Devlin) are attending the debate.
They have been active in promoting the interests of the north-east generally and have not been slow to draw the Department's attention to specific anxieties on this topic.

Mr. Don Dixon: So that I, too, may get my name on the record, may I remind the Minister that my constituency is across the river from Tynemouth, and borders on the constituency of my hon. Friend the Member for Gateshead, East (Ms. Quin) at Formby? I support the applications of the hon. Member for Tynemouth (Mr. Trotter) and of my hon. Friend.

Mr. Heathcoat-Amory: I am the first to recognise that the hon. Gentleman is a doughty fighter for the region and I apologise if I inadvertently overlooked his interest in the debate.
I shall start by putting waste management in a wider environmental context. We produce large quantities of household, commercial and industrial waste, perhaps some 80 million to 100 million tonnes a year. Most of it goes to landfill, but we also rely on incineration for some disposal. Only a small proportion of that large total is toxic, perhaps about 2 million tonnes. Such special waste comes under the ambit of the Special Waste Regulations 1980 which ensure close monitoring of movement and disposal under a system of advance notification to waste disposal authorities. The final disposal outlets must be suitably licensed under the Control of Pollution Act 1974.
Only a limited number of landfill sites are suitable geologically for hazardous or special wastes. We also have only a limited number of high-temperature industrial waste incinerators. To my knowledge, there are four with a total annual capacity of about 80,000 tonnes, so there are substantial pressures of demand on those facilities.
Environmental trends will place additional and increasing burdens on existing facilities and hasten the search for alternatives. For example, Ministers agreed at the 1987 North sea conference that dumping harmful industrial waste at sea should cease and that there should be strict ceilings on the disposal of sewage sludge. Inevitably, such decisions place additional burdens on landfill sites and encourage those concerned with waste disposal to look more closely at alternatives, such as incineration.
It is fair to point out that the north-east region as a whole is a net exporter of waste to other parts of the United Kingdom. Both Cleveland and Tyne and Wear produce more hazardous waste than they can dispose of within their areas. That suggests that there is a demand for additional waste disposal facilities in the region.
Those dilemmas over disposal options for waste generally are highlighted in the Tyne and Wear waste disposal plan, with which my hon. Friend the Member for Tynemouth will be familiar. The plan was drafted in 1986 to cover a 10 to 15-year period and the final stages of completion are now a matter for the Tyne and Wear authorities, acting through their joint committee on waste disposal. The draft plan notes the increasing public concern about hazardous waste disposal and the pressures arising from the loss of marine disposal outlets and tighter land-based incinerator standards. This could leave some hazardous waste without a viable means of disposal. The plan identifies the need for establishing alternative waste treatment facilities for hazardous waste and for monitoring the effects of these developments. It


acknowledges that, without more facilities, the pressure could lead to even greater amounts being exported from the region.
Difficult choices must be made. It is important that the disposal option in any particular case represents the best practical environmental option and that the standards set by the regulatory authorities are the ones that properly protect the environment and embody best domestic and European standards.
Against that background, I well understand that no one likes the prospect of having a waste disposal facility in their neighbourhood, whether it is a landfill site or a new incinerator. I appreciate fully the concerns that have been expressed by Opposition Members and by my hon. Friend the Member for Tynemouth tonight.
A number of applications for waste incinerators have been made in the north-east in the past year and it is for the local planning authority, in the first instance, to determine those individual applications.
Two appeals relating to waste incinerators are now before my right hon. Friend the Secretary of State. One is from Ocean Environmental Management Ltd. in respect of its proposed incinerator at Seal Sands. The other is from Northumbrian Water with International Technology Europe Ltd. in respect of their proposed incinerator at East Howden in north Tyneside, which is the application that particularly concerns my hon. Friend the Member for Tynemouth. I understand that a further application by Northumbrian Water and International Technology Europe in respect of an incinerator at Portrack is currently being considered by the Teesside development corporation.
Hon. Members will appreciate that I cannot comment upon the appeals now before my right hon. Friend the Secretary of State. However, my hon. Friend the Member for Tynemouth has put forward the proposition that the appeal cases should be looked at together. I think that can help my hon. Friend.
Although the proposed incinerators are some 40 miles apart, I recognise that there are common aspects involved. Both applicants have referred to the regional need for the facilities that they wish to develop and there is a significant overlap in the waste streams which both incinerators would deal with. Consequently, I am happy to be able to

tell my hon. Friend that it is indeed our intention that those cases should be examined at linked public inquiries. Dealing with them in this way would allow issues common to both, such as regional waste treatment capacity, movement of waste and environmental impact, to be dealt with at a plenary session attended by both inspectors and all the participants. All those issues have been raised this evening. Once those matters had been dealt with, the site specific and land use planning issues would be considered at separate, consecutive inquiries. The report of the plenary session and the separate inquiries would be considered together by the Secretary of State in making his decisions.

Mr. Trotter: On behalf of the north-east, I thank my hon. Friend for so readily accepting our proposal for a linked inquiry. I understand the considerable practical difficulties involved, but can he ensure that the utmost speed is shown in establishing that inquiry for the reasons that I outlined earlier?

Mr. Heathcoat-Amory: Should any further appeal be made relating to proposals for similar kinds of installation in the region—one or two have been mentioned tonight—or if my right hon. Friend decides that a particular application should be called in for his decision, it would be possible to include them, too, in the linked inquiry procedure I have described.
In answer to my hon. Friend, he will appreciate that it will take some time to tackle the necessary arrangements to set up those inquiries. We shall press ahead as quickly as possible, and we hope to have the inquiries under way during the latter part of the year. A linked inquiry procedure means, of course, that the final outcome will be delayed until all the applications have been considered. Our aim is to ensure that everyone has an opportunity to make their views known. But I confirm our intention to follow the code of practice for those inquiries set out in annex 2 to the Government's response to the fifth report of the Select Committee on the Environment, 1985–86, which sets out ground rules for ensuring maximum public participation.
I shall be writing to hon. Members, to the planning authorities and to the applicants in the next few days setting out the arrangements in more detail.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to Eleven o'clock.